04:41, May 08 379 0 theguardian.com

2017-05-08 04:41:03
Minimum wage ruling creates uncertainty over care worker pay

An employment appeal tribunal has decided that care workers required to sleep in at a service user’s home are entitled to be paid the national minimum wage (NMW) for all hours worked, including the hours spent asleep.

This decision will have serious consequences for social care. Wage costs may increase for many providers and there could be claims for back pay dating back up to six years. Failure to pay carries criminal penalties and fines, including the potential for doubling back pay arrears.

In the appeal case, the care worker was employed by the charity Mencap to sleep at a service user’s home in order to be available to assist them if an incident occurred. She was paid a flat rate of £29.05 for the nine hours she was on shift. She also worked during the day and received £6.70 an hour for that work. The NMW regulations state that all workers must receive the NMW as an average for all hours worked.

The tribunal found that the care worker was entitled to be paid an amount equivalent to the NMW for the whole period she was on shift, including when she was asleep. It found that the onus was constantly on her to use her professional judgment to decide if she needed to intervene.

The law on this is far from clear. The judge commented that there is no one single factor that will decide these cases and that employers have to look at several issues, including:

  • Is the worker there to comply with a legal or contractual requirement?
  • Are the worker’s activities restricted and would the worker be disciplined if they left the premises?
  • Is the worker responsible to take action?

There are still many unanswered questions and providers are still unsure of what they must pay but would be liable for substantial claims if they get it wrong.

A separate case heard alongside the Mencap appeal involved another care worker, there in order to fulfil the Care Quality Commission requirement to have enough suitably qualified, competent and experienced staff present. There was a waking worker at night who was paid for all hours worked, and a sleeping worker who was paid a £25 allowance each night and not for the hours they were asleep.

The judge commented that just because the sleeping worker was required to be at the premises all night did not mean they were entitled to the NMW when they were asleep. However, in this case the judge did not make a finding as there was insufficient information to apply the test referred to above.

It is down to HMRC to enforce the NMW, but, frustratingly, some HMRC inspectors have different interpretations of the NMW requirements. Some have assured providers that they are compliant and then changed their view after subsequent inspections, when it is too late for a provider who has already budgeted according to lower projected wage costs. This leaves many unanswered questions. Providers are still unsure of what they must pay but would be liable for substantial claims if they get it wrong.

The situation will only get worse. The NMW for those aged 25 and over is £7.50 an hour and set to increase to £9 by 2020. If Labour wins the general election, that would rise to £10.

There are ways around this. If a care worker is paid more than the NMW per hour for day work, for example, providers could increase the total payment so that the average hourly rate matches the NMW, but that would involve effectively dropping the hourly rate for day work in order to subsidise the sleeping shifts.

Some providers are asking local authorities to pay more. But many local authorities have structured contracts with no provision for the payment of sleeping time and say they can’t afford to pay more.

The Care Act requires local authorities to “promote the efficient and effective operation of a market in care and support services”. Its statutory guidance states local authorities should seek evidence that “service providers deliver services through staff remunerated so as to retain an effective workforce” and that “remuneration must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary”. Providers may decide to ask for a judicial review of any local authority’s decision not to meet the costs.

  • Deborah Hely is a partner, employment and pensions group, with DAC Beachcroft

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