‘Providers cannot increase pay for home care workers at time of council cuts’

Many providers include a compensatory payment for travel time within the rate paid to staff for time spent delivering care in a service users’ home (known as ‘contact time’). This practice is entirely lawful, so long as the pay averages out at or above the national minimum wage (NMW) once you factor in travel time, taking account of out-of-pocket expenses, including vehicle mileage or use of public transport.

The system of paying travel time within contact time came about largely a result of the way local councils contract for home care services.  In a recent survey, UKHCA found 98% of providers were paid solely for contact time by their councils and were expected to meet payments for travel from this fee. This was a tolerable system in the past, as providers and their workers could generally be confident they were able to pay well above the NMW.

However, constrained public spending has led to cash-strapped councils engaging in aggressive cost-cutting measures to push providers’ prices down, through tendering, price re-negotiation and withholding real-term inflationary increases. The amount of contact time available for care has generally reduced and the funding available to people using personal budgets and direct payments have been equally affected. As visit lengths reduce, travel time becomes a higher proportion of working time, increasing the risk of non-compliance with NMW laws.

These savings place even greater strain on providers’ ability to properly reward their workforce. Once operating costs and compliance with the requirements of regulation are met, independent and voluntary sector organisations typically make a net margin (profit or surplus) of 2-3% on home care funded by councils. The expectation that providers could increase the wages of the home care workforce without better funding from the state is therefore unrealistic.

The challenges of working out travel time

Many people understandably argue that care workers should receive separate payments for contact time and travel between visits, as both would appear to be working time. However, demand for home care usually centres around mornings, lunchtime and evenings, with periods of inactivity in between. Depending on their terms and conditions of employment, many care workers are effectively engaged in several separate periods of employment throughout the day. Travel to and from home to one’s place of work is generally not included in calculations for compliance with the NMW.

Establishing which journeys during a care workers’ day count as travel time for NMW purposes is extremely complex. This is the other main driver behind calculating wages by reference to contact time only – the benefit of simplicity for commissioners, employers and their workers.

If providers are to continue to pay for travel time within contact time under the rates imposed by councils, they should regularly audit their workers’ wages against travel time to reassure themselves of compliance with NMW laws. And they should alert councils to rates that would force them into potential non-compliance. However, there is serious lack of guidance on how to apply NMW regulations to complex working patterns, such as those found in home care. UKHCA has urged both the Low Pay Commission and HM Revenue and Customs to help make such information available.

Councils must act on information from providers

HM Revenue and Customs are already looking at NMW compliance in the home care sector and inspectors have visited a number of employers over the last year. Should individual providers be found to be non-compliant, we fear it may have arisen unwittingly, as charge rates have been eroded by cost-saving measures by councils, while NMW levels increase year-on-year.

Over the last year, a number of judicial reviews have found against councils that have failed to take account the real costs of social care. UKHCA has produced an online costing model for our member organisations, which takes both travel time and compliance with NMW into account. We strongly encourage providers to use this tool as part of their dialogue with councils over contract prices and we urge councils to act on this information.  Otherwise those councils will be complicit in the worsening pay and conditions of the social care workforce and are increasing the risk of breaching the NMW.

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Non-payment of travel time for care workers ‘breaks minimum wage laws’