This week, UK care providers warned that the sector could face collapse, as a result of HMRC chasing them for hundreds of millions of pounds in backdated payments for employees providing sleep-in care services.
For many years, care workers have been paid a flat-rate allowance of around £35 per shift for hours spent sleeping at residential facilities or at service users’ homes, in order to provide on-call care around the clock. But a recent ruling has determined that workers should instead be paid minimum wage for these hours – and HMRC is demanding, by September, back payments of up to six years.
What’s behind the row?
An employment appeal tribunal in May ruled that Mencap must pay a worker the national minimum wage (NMW), as opposed to a fixed rate of £29.05, for sleep-in hours as part of care for two vulnerable adults.
This followed a 2014 case heard by the same tribunal, relating to a care worker supporting three disabled adults in their home, which deemed her to be eligible for the NMW while asleep. Guidance issued in 2015 by the Department for Business, Energy and Industrial Strategy (DBEIS) similarly says: “A worker who is found to be working, even though they are asleep, is entitled to the national minimum or NLW [National Living Wage] for the entire time they are at work.”
But the picture is not 100% clear, with the judge at this year’s employment appeal tribunal emphasising that the factors set out in the Mencap case needed to be carefully considered in relation to different workers’ circumstances. National minimum wage legislation published in the same year as the DBEIS guidelines also says that a worker can only be considered to be “available” when “awake for the purposes of working”.
How much money is owed?
Charities say that the six years of backdated payments sought by HMRC could reach at least £400 million. Additionally, a joint statement provided by care sector representative bodies Learning Disability Voices, Care England and the Voluntary Organisations Disability Group put the total funding gap over the next four years at an estimated £600 million.
Why are charities warning the sector could collapse?
Providers say the care sector is already facing a funding crisis thanks to factors including an ageing population, huge cuts to council budgets and the adoption of the National Living Wage. Research has identified a rise in the number of care providers going bust in recent years while there have been national headlines this year around more providers terminating contracts with councils because the money on offer makes them unviable. Last year the Care Quality Commission, the industry’s regulator, described the sector as being at a “tipping point”.
What happens next?
Care sector bodies are calling on the government to immediately suspend HMRC’s enforcement activity until the law is clarified, and publicly fund back pay liabilities if the Court of Appeal upholds the re-interpretation, in order to stave off the crisis.
Martin Green, chief executive of Care England, said: “The lack of clarity over sleep-ins is an enormous challenge facing providers across the country. The government’s recovery of sleep-ins must be suspended immediately, with a clear and definitive position on back payments put forward.”
However, Unison, which represents a number of care staff who work overnight shifts, has raised questions over the providers’ stance.
“It’s the government’s failure to fund social care properly that risks devastating the care sector, not the workers asking for a legal wage,” the union said.
“Charities and care companies have known for a long time they must pay sleep-in staff at least the minimum wage. But it’s only now HM Revenue & Customs is in pursuit that many are pleading poverty and asking for an exemption from the law.”
What does the government say?
A spokesperson for the government pointed to the 2015 guidelines issued by the department, noting that it is “an employer’s responsibility to know the law” and that the government had allocated an extra £2 billion of funding to the adult care sector at the last budget.
“We recognise the vital role social care providers play in supporting some of the most vulnerable people in our society and workers in that sector should be paid fairly for the important job they do,” the spokesperson said.
“The government is considering this issue extremely carefully and ministers continue to meet with care providers to ensure any action taken to protect workers is fair and proportionate.”
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About time staff was paid a decent rate for this, what people seem to forget that these sleep ins are often done after an afternoon shift,
Usually starting around 3pm in the afternoon, the sleep in part usually starts at 10/11pm and then that same staff member works the morning shift from 7/8am up to 3pm.
So that’s 24hours away from home and family and not getting at least 8/9hours pay at the usual rate.
No matter how you cut it that is unfair.
Hi Joe
The knock on effect of NMW hourly rate for the sleep-in hours is that as stated by you that you are away from home for 24 hours, the Working Time Regulations1999 states that each worker entitled to 11 hours rest in every 24 hour period, thus your working time hours should only amount to 13 hours, this is a statutory entitlement, some employers will attempt employees to sign/agree opt-out agreement with employees if no union in the work place.
Hi Santino
Thanks for the reply,
Every company that I have worked for,have said sleep in hours are counted as your rest with each shift split into Afternoon – Sleep In- Early
I hope what im understanding from you is correct in that Sleep in hours count towards our weekly hours?
Thanks
Joe
Let’s not forget that part of the equation in this area are the individuals who employ staff themselves directly to act as personal assistants and sleep in their homes at night with only a minimum disturbance from rest. The sad thing is if personal assistants’ pay in this situation is raised the cost of supporting people, who need high levels of support, will be so high in their own homes we shall be back to an institutional model, with the cheaper residential care being used by cash strapped local authorities and indeed self funders. That is not of course a justification for exploiting workers and paying them too little but is there not a compromise here rather than ignoring the needs of the individuals who need the support? I write as a user with high support needs who needs such overnight care with workers sleep being interrupted once for turning between 11pm and 8am.
Clare
You are so right! We are in exactly this position. We have had no increase in DP,s for 10 years, used to support our severely disabled daughter. In that period holiday entitlement has increased from 4 to 5.6 weeks, employer NI has gone up, minimum wage has gone up, and now we have the sleep-in problem.
If we have a reassessment there is the threat that if the cost of domiciliary care is higher than the cost of residential care our local authority will give us 2 options – either fund the difference ourselves or residential it is!!!
Meeting needs in our area is a poor second priority in comparison with meeting budget
Personalisation…..you must be joking!
This is my perspective as a Personal Assistant to a lady with advanced MS and on Direct Payments to employ her own staff.
The local authority do not treat us with the respect they should. Our pay rise requests are continually turned down and we are told that there is no funding. I not only care but do the financial returns. I know that money accumulates in the account and is returned to the local authority. Nobody can explain that when they do a costing. The local authority also increase the hourly rate to the client annually yet there’s no provision made for the staff to get even a 1% pay increase. We have not had a pay rise in 7 years. Only recently has our sleepover payment increased slightly. It’s time for the government to stop ignoring us that work with Direct payment recipients. We provide a valuable service that saves them money as they do not have to pay agency rates. We do not get any perks except for double time on bank holidays and now after paying me that for the last ten years they want to take it away from us saying it’s due to insufficient funds. How when it’s been costed into the package for 10 years now is there insufficient funding?
Care companies pleading poverty is a load of rubbish, the money they aren’t paying for sleep shifts just goes into their profits. My partner was owed £60K in unpaid wages from 19 years of service to a care home which had £250K in the bank – when we approached them for it they just took all the case out in dividends, sold the business to a phoenix company & left us chasing the liquidator whilst they enjoyed the money !!!!
Care services , Local Authorities, claiming no money when they have exploited the situation for years is no justification.
I currently support my Dad 24 hrs via Direct Payment in my home and i have mentioned this at every review, assessment.
Yet this area has never been addressed, they accept that i am doing a waking night due to dads health related issues, Alzheimer, Parkinson’s Lewis bodies diagnosis but they will not increase the Direct Payment to reflect this. Tomorrow the Annual assessment will be being done again. I hope residential services offering care at home will also be looked into the increase cost of lights, being left on, laundry washer never goes off, i am up to 5 times in any one night. I to decided to add a comment i fair i am not the only one supporting a loved one who requires this level of support Day and night care to provide independent living.
There is currently a case going to the Employment Tribunal by two Foster Carers seeking to be classed as council employees, hope that they win their case, if successful then the issue of sleeping in at NMW will be raised.
Employers have known for a long time that it should be paid at NMW but until HMRC put their foot down nothing was happening.
Back in 2001 I took my employers to the ET about not being paid my hourly rate/NMW although the judgement confirmed that I could not be made to work over 13 hours without a break ( sleep in over 24 hours with 8 hour shift either side) they did not decide on hourly payment.
What the employers did was to state that workers would be required to work over six days(Working Time Regulations 1999 only states that employees entitlied to one day rest period in 7 days or 2 days together in 14 days) in the week if employees would not work 24 hour sleeping shifts.
The knock on effect of a positive outcome will be for residential care if cheaper to replace Direct payments/Personal Health Budgets.
Part of the point of having a sleeping in staff member is that they are available and may be called upon and therefore will be awake and working and cannot be guaranteed a proper night’s sleep. If they were not needed to possibly be awake they wouldn’t need to be employed at all. So they have an interrupted night’s sleep and then need to sleep (and not be able to work for a wage) the next day. It makes absolute sense that these staff should be paid minimum wage (at least).
It would be terrible if this rise in costs to give care workers people what they are truly entitled to led to people being forced into residential care (and surely there are some Human Rights implications there?), but the care workers should not be blamed for this.
I absolutely agree.
I work as a live in carer I do 8-10 weeks working every day with only a 2 hr break daily I get paid a flat rate per day and get nothing for the nights I cannot leave the property how can I get this ?
Hi Janet
Im I reading this correct.
You are working 22hrs a day for 8-10 weeks?
Joe
I saw someone comment, stating that the sleeping period is considered a rest period and that’s why it shouldn’t be paid. Well, as someone who does 10+ sleep ins per 4 weeks…. If that is the case, then why am I not allowed to go home and be with my family during this “rest period”?
I read the working time regulations 3 years ago and even then it seemed clear to me that we should be paid hourly for sleep ins. I brought this up with management at the time and they knew about it. They have dragged their feet hoping that courts or government will change the rules. It is now panic time because hmrc have taken the matter to court and won. My employers have already started trying to wriggle out of it by interpreting the judgement wrongly as I see it. Pay us what we are legally entitled to.
I do around 12 sleeps a month. I don’t get woken very much, but my sleeps Are Not the same as being at home, I sleep much lighter and im aware of others moving around toilet etc. The new rate for sleeps has helped alot financially,
I’m concerned that these back payments are going to ruin the private sector companies and charities, I’m still not clear why its 6 years back dated ?
The headache will be, are sleeps classed as normal working hours ie If you do sleeps they are counted towards overall hours, so you would be doing to many hours a week by a long way. Also whether they would be counted in holiday hours and paid while your on holiday ?
It all really needs clearing up and hopefully workers will not loose out,