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HMRC Accused Of Outrageous Inconsistency Over Care Worker Pay

May 15, 2017

Care providers face bills for up to six years’ back payment of minimum pay rates for sleep-in shifts, even though internal guidance at the wages inspectorate failed to require such rates until last year.

Freedom of information requests reveal that the inspectorate, part of HMRC, was until February 2016 seemingly working to guidance that specified minimum rates only when a worker was “awake for the purposes of working”.

The discovery adds further controversy to a row that is convulsing the learning disability sector, in particular, and is threatening the viability of many providers. Learning disability charity Mencap has warned it faces a financial crisis over the issue.

Matt Wort, partner at law firm Anthony Collins, which lodged the FoI requests, said: “It is completely unreasonable that HMRC is now pursuing back payments that could financially cripple or even bankrupt businesses that provide essential care to those who need it most.

“At the same time as demanding those payments, in some cases for periods running back to 2010, we now know that at least until February 2016 HMRC was advising its own compliance teams that care workers were not entitled to the national minimum wage while asleep. The inconsistency is outrageous.”

The row is not a straightforward issue of whether employers have been ducking a legal duty to pay the statutory minimum wage (now £7.50 an hour for workers aged 25 or over), as interpretation of the law has been unclear and disputed.

Custom and practice in the care sector has been for payment of a flat rate for each sleep-in shift, considerably less than the hourly minimum, with the full rate kicking in if the worker is roused to help a person they are supporting.

In recent months, however, HMRC inspectors have been warning providers that they should be paying the full rate through the night and have been instructing them to calculate back payments for up to six years. Some providers face bills of millions of pounds.

The issue, which also affects 65,000 disabled people who pay their own support workers, using personal budgets allocated by councils, is being seen as a threat to the whole concept of independent living in the community for people who need 24-hour back-up.

In response to the requests by Anthony Collins, which is representing several employers affected, HMRC has disclosed internal documents that appear to show that until February 2016, its inspectors were following 2003 guidance that minimum wage was payable “if the period when sleep is permitted is interrupted and the worker is awake for the purposes of working”.

Under last year’s new guidance, revised following several test cases, HMRC told its inspectors that staff “do not have to be awake to be working” if their contract and employment arrangements prevented them from leaving the premises.

A spokesman for HMRC, speaking before the general election was called, said it enforced minimum pay rules in line with guidance issued by the business department. While legislation governing sleep-in shifts had not changed since 2000, it had been “explored” by tribunals. Operational practice took account of relevant case law.

In a letter at the end of April, Margot James, minister for small business, consumers and corporate responsibility, acknowledged concerns about HMRC’s enforcement activity but said it was obliged to respond to a rising number of complaints about sleep-in pay “and it is only right that the government investigate these fully”.

James told Rebecca Pow, then Conservative MP for Taunton Deane, that she had met health, local government and Treasury ministers to try “to identify a way forward that addresses the concerns of care sector employers without undermining our minimum wage policy of ensuring fair pay, especially for vulnerable, low-paid workers”.

2 Comments leave one →
  1. cmgregson permalink
    May 15, 2017 11:02 pm

    I’ve left a comment on the original article attempting to give support workers’ experiences of sleep-ins. Hopefully we can find some common ground.

  2. concerned citizen permalink
    May 18, 2017 1:48 am

    Hello, please note that the national minimum wage law is 17 years old. Perhaps, when written, it was unclear about whether ‘sleep ins’ met the legal definition of ‘Time Work’ but It has since been clarified. It is now so specific on pay for ‘sleep ins’ that the government’s own Department for Business, Innovation and Skills (BIS) guidance document ‘Calculating the Minimum Wage’ published on 22/4/13, includes the following direct quote:-

    Example 1 – where the minimum wage is likely to apply.
    A person works in a care home and is required to work overnight shifts where they sleep on the premises. The person’s employer is required by statute to have someone on premises for health and safety purposes. The person would be disciplined if they left
    the premises at any stage during the night.
    It is likely that the person would be considered to be ‘working’ for the whole of the overnight shift even when they are sleeping.

    Therefore organisations paying sleep in staff below the minimum wage (dependant on responsibilities) should have reassessed staff’s pay AT LEAST 4 YEARS AGO, then should have approached local authorities, who in turn should have approached government with a legal argument for more funding.
    This has been known about for years by organisations, local authorities and government, but ignored because this form of modern slavery (an average of £3.23 per hour wage?) affects so many staff. If the people being paid illegally were people with disabilities who are being supported, the country would quite rightly be up in arms about it.

    The mencap sleep in case mentioned has already been through 2 courts (the employment tribunal, and employment appeals tribunal) and is heading to a 3rd court for ‘clarification’, though quite what their motive is for claiming the court decisions and the law appear ‘unclear’ is up for interesting debate. Also, despite misquotes in the Guardian newspaper, these decisions are directly from the courts: HMRC have not been involved in this mencap case yet. (though I suspect they will be very interested the outcome)

    Now is the time to take direct action and raise these issues through the courts, therefore ultimately forcing the government to put more money into health and social care, and recognising the dedication and hard work of often undervalued care staff.

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