National minimum wage breaches in two social care companies follow training disputes

Ultimate Care and Counted4 fined for deducting training payments from employees which then brought their pay under the NMW

Photo: Rex/Jeff Blackler

A care home and a drugs and alcohol community interest company have been “named and shamed” by the tax office for not paying the national minimum wage (NMW) to workers.

However, both companies have claimed their inclusion in the list of 37 companies by Her Majesty’s Revenue and Customs (HMRC) is unfair. In both cases, it was the result of a dispute with former disgruntled employees over training payments.

Marc Rowland, managing director of Ultimate Care in Ipswich, said: “Over three years and a wage bill of £798,000 they [HMRC investigators] found seven employees had been underpaid in their last pay packet. This was because of a training agreement in place with those employees which authorised me to deduct the costs of the training from their wage.

Legal advice

“We did this following legal advice but HMRC advised me that we cannot do that if it brings the employee’s wage under the national minimum wage. We changed that policy immediately and our legal advisers have taken full responsibility and refunded us the money we had to pay which was £617.”

Counted4, a drugs and alcohol community interest company, neglected to pay £931 to a worker in a similar dispute with a senior team manager who was on a salary of £30,000pa.

“We reclaimed the money when they [the manager] left the company at short notice. When it was brought to our attention we repaid the amount and have now issued legal action to recover the outstanding debt.”

Counted4’s Chief Executive John Devitt said: ‘As an agency that stands up for some of the most stigmatised and under-represented people in society, we strongly resent inclusion on this list, for what was essentially a dispute with a well-paid ex-employee.”

Thorough investigation

HMRC said the 37 cases named were thoroughly investigated after workers made complaints to the free and confidential Pay and Work Rights Helpline. It’s budget has been increased by a further £3m to investigate companies not paying the minimum wage.

New legislation is also in progress to ensure penalties of up to £20,000 can be applied to each underpaid worker rather than per employer. The NMW is current £6.50 per hour for an adult over 21 years.

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2 Responses to National minimum wage breaches in two social care companies follow training disputes

  1. john bruce January 17, 2015 at 10:15 am #

    Now that David Cameron has spoken out in Washington supporting a rise for the lowest paid towards the ‘living wage’, we look forward to the dept of health adopting the Ethical Care Charter and giving guidance to all local authorities to include the values and standards of the ethical care charter in all contracts. The race to the bottom to get the cheapest contracts possible for domiciliary care and residential homes has brought poverty misery and insecurity for front line carers , loss of some of the most suitable and experienced carers who can’t afford to do what they love to do, so we get them leaving, rapid turn over of carers going in and out of the homes of some of the most vulnerable people in our society.
    In the absence of commitment of the current central government, noises but not decisive action. More local authorities should not wait for central government action, reduce the misery and poverty of front line carers, bring more stability and ethical values to care given by local authorities on our, the general publics behalf , and sign up to the Ethical care Charter put forward by UNISON. It is so shameful that more authorities especially including Liverpool have not signed up to these meagre but vital standards yet and continue wash their hands of responsibility for what happens at the front line of domiciliary and residential homes. Hundreds of column inches and hours of TV news and debate focuses on the overflowing hospitals, but the adoption of the Ethical Care Charter , its standards and better practices would be a major contribution to skilled and experienced carers remaining in the care market, better supported and trained, bringing more stability to community care and a major contribution to less people being rushed off to hospital and more successful support to remain at home or even care homes. But sorry, I forget no one is really commissioned to look at the big picture and unless central government change the rules and focus, all local authorities will be under pressure to get our community care as cheap as possible. Its a culture of management by the spreadsheet, regardless of the consequences to the customers, front line staff and the instability of community care, its multi agency collaboration and front line carers, a key component…. and knock on effect everyone beating a path to the local hospital doors.

  2. patrica January 19, 2015 at 8:50 pm #

    nearly every person getting care that is council funded need more time, that is my experience, I reckon about a quarter of an hour extra each visit would be about right in most cases plus traveling time ex carer