From the TUC

Why on earth have social care workers not been getting the National Minimum Wage?

18 Aug 2017, by in Working Life

Enforcement of the NMW for sleep-ins temporarily suspended in social care

Last month the government announced it was waiving historic financial penalties and temporarily suspending enforcement of the National Minimum Wage (NMW) for workers required to ‘sleep-in’ on their employer’s premises overnight to look after social care residents.

This is unprecedented action from a government that has, up to now, been rather keen on enforcing the NMW. It appears that some social care employers have said they will collapse if they have to pay arrears, which have been estimated by employers as ranging somewhere between £100 million to £400 million.

These figures are simply ridiculous overestimates. According to the government’s July 2017 evidence to the Low Pay Commission, they recovered £374,000 arrears in social care last year and I calculate that a total of just over £700,000 has been received for workers in social care in the past three years. Note that this includes arrears for issues beyond failure to pay for sleep-ins, such as non-payment of traveling time between visiting clients.

In a week that has seen the government named a record number of underpaying employers in other sectors it is time to have a look at how social care got into this kind of debt – and what will happen next.

What went wrong in social care?

The first thing to say is that most social care is now provided either by private sector companies or charities. Local authorities fund most social care and, faced with continuous government cuts to their budgets, have squeezed social care funding year after year.

Against that tight financial background, a number of social care providers have buried their heads in the sand over the growing certainty that they must pay the minimum wage.

Before the minimum wage was introduced employers commonly paid workers a flat fee for sleeping in, plus an hourly rate for time spent actively working. This was changed by successive employment tribunals from the late noughties onward, albeit with a certain degree of see-sawing back and forth so it really should not be a surprise for employers that the minimum wage applies to workers.

Just how clear is the law on the NMW and sleep-ins?

The law has certainly been in a settled position since the 2013 Whittleston v BJP Home Support Limited Employment Appeal Tribunal.Government guidance on the NMW also makes it clear that the NMW must be paid for sleep-ins.

Six years of minimum wage arrears can be claimed in England, Wales and Northern Ireland and five years in Scotland, so you might wonder why some of the handfuls of large employers who are complaining did not at least consider making provision against the day when they would have to pay up.

Trade unions have been visibly negotiating and campaigning to ensure that social care employers pay up. In particular, UNISON reached a notable agreement (with MENCAP in June 2017, meaning that staff would receive the NMW for sleep-ins from then on.

Employers could also have sought free advice from ACAS if they were in any doubt about the right thing to do – and they should have done so, but some have simply failed to face up to their responsibilities.

What does the government’s partial suspension of enforcement on sleep-ins mean?

Basically, the government’s announcement means the social care sector has three months to get its act together. Employers have been let off of historic civil penalties in current cases. These can be quite substantial, as these penalties are twice the amount owed, up to a maximum of £20,000 per worker.

However, the government will continue to pursue arrears for workers in these cases, and we have been ensured that full enforcement will resume in October.

Resuming normal service will not be enough

Social care providers need to take these announcements as a wake-up call. The government simply cannot afford to let them off of the NMW, and should be clear that no extension of the penalties amnesty will be forthcoming. Providers should face full enforcement for any new offenses that occur from October onwards.

But the government does not come out of this very well either, as squeezing funding on social care has been a contributory factor.

The government must find a way to ensure that social care has sufficient funding and to ensure that social care workers are paid at least the NMW, which is the bare legal minimum. Failure to achieve these goals means that those receiving care and those who deliver it will both suffer, which is something that any shrewd government will want to avoid.

9 Responses to Why on earth have social care workers not been getting the National Minimum Wage?

  1. Daniel Vulliamy
    Aug 19th 2017, 8:56 am

    I don’t disagree with the thrust of your analysis and argument, Paul. But when you say, ‘most social care is now provided either by private sector companies or charities’, you are ignoring individuals with severe disabilities living at home who are the employers of carers. I have no idea how big that part of the sector is, but I can feel very sympathetic towards people who must feel very frightened.

  2. Sarah
    Aug 20th 2017, 2:59 pm

    There are hundreds of disabled people on direct payments in every council. I am one of them. Luckily I never needed to pay for sleep-ins. But if I had, I would be affected by this and would be terrified.

    The thing you have to understand is that we have no say at all in how much we pay our employees. This is imposed by our council and thus is a complete postcode lottery.

    As an example my own council gives a very good hourly rate because it was taken to court some years back on the basis that direct payment users shouldn’t be penalised compared to those who used agencies.
    I know of other disabled people who can only offer their care workers a rate of pay a full £4 an hour less than that which I can.

    This brings us to sleep ins. Likewise, when assessed as requiring sleep-ins, the council only provided disabled people with a flat rate, and gave the advice to pay this to the care workers.

    We are not able to pay more to our care workers as through the “Fairer Charging Scheme”, we have to contribute to the cost of our care package. Social services are allowed to take 100% of our “disposable income”. This leaves nothing to top up the pay of our care workers.

    Yet now, we are being held personally responsible for our care workers not being paid their due wage. But it was the council, and by extension the government who not only gave bad advice, but failed to give disabled people the necessary funds to pay for the care they had been assessed as needing.
    Who, here, is at fault?
    Yet who is about to bear the brunt of this fiasco? Disabled people are already being threatened with court action to the tune of tens of thousands of pounds. It is quite simply wrong.
    And it is just as wrong to ignore their/our situation and assume it is only large companies and charities this will affect.

  3. jazza
    Aug 21st 2017, 6:50 am

    as usual the TUC are light years behind this government devious and illegal practices – and the disabled and the poor pay as usual – or just die – and nobody cares

  4. Paul Sellers

    Paul Sellers
    Aug 21st 2017, 9:51 am

    The TUC is campaigning for more funding for social care and for better enforcement of the minimum wage.

    I’m sympathetic to those who have opted for direct payments. Not least because that is what my mother did.

    I think that the caveat is that those who are thinking of taking up this option need to take proper advice on their responsibilities as an employer, which includes things like paid leave, sick pay and redundancy pay, for example.

    As my blog says, employers who commission sleep-ins should already have been paying the minimum wage for the whole period.

    I will raise the issue of advice on employment law given to those on direct payments, as it clearly needs improving.

  5. Sarah
    Aug 21st 2017, 3:28 pm

    I think you continue to ignore the fact that these particular disabled people were not given enough money to fund their care.

    The calculation made by the council to establish how much they would receive in direct payments assumed they would pay a flat rate for a sleep-in.

    Thus it was far more than just “advice”. It was what they were told they were *allowed* to pay and what they were given to do so.

    The councils should have been awarding larger direct payment packages and should never have told their direct payment recipients that they were obliged to pay a flat rate.

    Disabled people have been put in an impossible position while the council is getting away scott free.

  6. Paul Sellers

    Paul Sellers
    Aug 21st 2017, 4:08 pm

    I wouldn’t mind hearing from some disabled people who actually do directly employ carers for sleep-ins.

    If there are many of them then i would expect some of the disabled campaign groups to have said something, but the only voice that i have heard on he employers side is MENCAP.

    If councils have indeed forced some disabled people to employ carers at less than the minimum wage then it unlikely that they will be able to evade all responsibility.

    The position on employment is not entirely straightforward. For example, if you use your direct payment to hire somebody from an agency, then they may legally be the employer. similarly, some local authorities take back the responsibility of managing those employed with direct payments through a front-end agency (for example, Poole in Dorset).

    In any case, employers, including individuals, who have not been paying the NMW for sleep-ins will have to pay the correct rate going forward, plus back pay. More positively, civil penalties have been waived in historic cases, which otherwise could have tripled the amounts owed. The government has already made it clear that they will not seek to reverse the court’s decision, as to do otherwise would be to undermine the national minimum wage.

    My best advice is that any one employing directly who thinks that they may be affected should take advice as soon as possible from their trade union, CAB or from one of the disability charities and campaign groups .

  7. Claire Thompson
    Aug 22nd 2017, 10:45 am

    I am about to launch a care agency providing staff. I believe our model will ensure better rates of pay and lower costs for care ‘units’. I’d love to talk to you for your view and to ensure we structure things well from the start.
    I don’t believe it’s deliberate on the part of the care providers – they are under ridiculous pressure to offer hotel like services, with care provision and specialist medical care on top, but charging less than a hotel room each night.
    I do believe we can be part of the solution.

  8. Sarah
    Aug 22nd 2017, 1:46 pm

    DRUK (Disability Rights UK) has been trying both to raise awareness of the problem and seek clarification from the government.

    John Pring from Disability News Service has reported on the issue.
    https://www.disabilitynewsservice.com/pa-employers-are-facing-probes-into-sleep-in-minimum-wage-back-pay/

  9. Paul Sellers

    Paul Sellers
    Aug 22nd 2017, 2:20 pm

    Disabled people who employ carers to undertake sleep-ins deserve to have absolute clarity about the situation.

    The TUC will meet the government again next week to discuss further.