Enforcement action over overnight care pay suspended

26 Jul 17

The government has temporarily suspended HMRC enforcement action and is waiving historic financial penalties against the social care sector in its row over sleep-in shift pay.

The move, announced today, follows calls by charities for the government to rethink its position amid fears the measures would push the sector to the brink of collapse.

Whitehall had plans to chase employers for hundreds of millions of pounds in backdated payments for employees providing sleep-in care services.

Until recently, care workers had been paid a flat-rate allowance of around £35 per sleep-in shift at service users’ homes, in order to provide on-site, on-call care.

But a recent employment tribunal ruling determined that workers should instead be paid the minimum wage for these hours.

Mencap, the learning disability charity, warned earlier this month that the “looming crisis” would have cost the sector around £400m.
The Department for Business, Energy & Industrial Strategy said it had responded to concerns over the combined impact that financial penalties and arrears of wages could have on the stability and long-term viability of providers.

Now the government won’t pursue financial penalties owed by employers who have underpaid their workers for overnight sleep-in shifts before 26 July 2017 and it will push back HMRC enforcement activity concerning payment of sleep-in shifts by social care providers until 2 October 2017.

However, the government has reaffirmed its commitment to ensure workers in the social care sector receive the minimum wage they are legally entitled to, including historic arrears. But it stressed the long-term stability and success of the social care sector is a priority.

Matt Wort, partner at law firm Anthony Collins Solicitors, welcomed the desicion by the government but warned that many providers were still "nervously" waiting for a further announcement in October regarding HMRC's next step on enforcement of alleged arrears for sleep ins.

Wort added: "In light of the government reiterating their view that every hour of a sleep in counts for national living wage (NMW) purposes they must now find the money so that local authorities can pay providers to pay staff the NMW throughout a sleep in.

"The UK's social care crisis is not going away and government must work with providers to find commercially viable and fair solutions to help them deliver their services."

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