National minimum wage breaches are being investigated at around 100 social care companies, the government has revealed as it named one provider for non-compliance.
Her Majesty’s Revenue and Customs (HMRC) has also began six proactive investigations into the largest care companies to identify possible breaches of minimum wage law.
The government said that East Midlands Crossroads – Caring for Carers, which provides a range of services including carers breaks, had underpaid 184 care workers just over £37,500. This was the largest by far of 70 cases of companies not paying the minimum wage, revealed today by government. It is the third social care company to be named by the government for non-compliance.
Ultimate Care and Counted 4 were fined in January 2015 for deducting training payments from employees, which then brought their pay under the minimum wage.
A spokesperson for East Midlands Crossroads – Caring for Carers said: “Over the last few months we have been working closely with HMRC to establish our compliance with the National Minimum Wage regulations. The legislation is complex, in parts ambiguous, and open to interpretation.
“We were unaware of our past noncompliance and worked with HMRC to identify to what extent we needed to back pay our workforce, and to ensure compliance with this complex legislation now and in the future.
“We were pleased to be able to work with the HMRC and are happy that we have been able to fully address this issue, with all back pay having been paid in September 2014.”
Companies are named if they are issued with a notice of underpayment by HMRC for not paying the minimum wage and do not appeal, appeal unsuccessfully or do not meet one of the exceptional conditions for not being named. Where a notice of underpayment is issued, companies are required to pay back the money owed to employees or face a penalty.
‘Tip of the iceberg’
Norman Lamb, minister for care and support, said the 100 care companies being investigated were just ‘the tip of the iceberg’ in the sector.
“We are absolutely committed to getting back the wages people have worked so hard for and will continue to name, shame and fine these employers until every care provider gets the message,” he said.
The government is now working with the Association of Directors of Adult Social Services and other sector organisations to understand more about the causes of non-compliance.
It is also trying to raise awareness of wage standards with employers and care workers, including ensuring that staff know how to complain if they believe they are not being paid the national minimum wage.
Colin Angel, policy and campaigns director at the UK Homecare Association, said: “It is never acceptable that workers are paid less than the minimum wage. We continue to be gravely concerned, however, that underpayment is a symptom of the low value that society, including statutory sector purchasers, places on care services.”
The 70 employers named were today were found to owe workers a total of over £157,000 in arrears. They have been charged financial penalties totalling £70,000
HMRC’s enforcement budget has also been increased by a further £3m to help fund more than 70 extra compliance officers.
Heather Wakefield, head of local government at UNISON, added: “The scale of this scandal requires a thorough HMRC investigation that targets far more home care providers – especially those that can afford to pay decent wages.
“The owners of the companies that provide home care should stop looking to exploit their workers in such an underhand way. Attracting and holding on to dedicated, highly trained staff is not going to be possible if employers insist on breaking the law.”