Government waives penalties for underpaying social care staff on sleep-in shifts


The government has waived financial penalties for employers in the social care sector that relate to the underpayment of staff during sleep-in shifts up to 26 July 2017.

A sleep-in shift is when an employee completes an overnight shift where they have to be on the employer’s premises, for example a social care worker staying overnight in a residential care home. HM Revenue and Customs (HMRC) has been investigating employers in the social care sector for underpaying employees for these shifts.

HMRC will also suspend enforcement activity relating to underpayment for sleep-in shifts in the social care sector. This will apply until 2 October 2017.

Any employer that underpays their staff for sleep-in shifts in the future will be liable to pay financial penalties of 200% of the arrears found.

During the suspension period, the government will work with social care providers to see how any potential impact on the provision of social care as a result of HMRC investigations can be minimised.

Through these measures, the government aims to ease the financial strain on social care providers. The government believes that the cumulative cost of both enforcement penalties and wage arrears could pose financial challenges for employers in this sector, which could lead to some being unable to reimburse underpaid staff.

National minimum wage guidelines state that employees who are found to be working, even if they are asleep, are still entitled to the minimum wage for the entire time they are at work. This would apply if there is a statutory requirement for an employee to be present, or they would face disciplinary action if they left the workplace. However, payment of the minimum wage is dependent on the situation and the nature of work-related obligations which the employee has while asleep. For example, where an employee is only available for work and is permitted to sleep, and suitable sleeping facilities are provided at the workplace, then the employee would only be paid for the times they are awake for the purpose of working.

The government conceded that guidance that featured on its website before 27 February 2015 was potentially misleading about the circumstances when employees should receive the national minimum wage when they are permitted to sleep.

Rehana Azam, national secretary for public services at trade union GMB, said: “Not only is this ridiculous, it’s reckless. This kind of deregulation will cause suffering for both service users and staff. GMB and others have long campaigned for fair funding and highlighted how this government had longed papered over the cracks.

“This announcement shows the sector is not in a crisis; it has already broken down and desperately needs additional funding. However the underpayment of the minimum wage in the care sector is not the answer, it is a national scandal. Employers may feel emboldened to break the law again in the future.

“GMB urges the government to rethink their ill-judged decision, because it’s service users and staff who will carry burden and feel the impact of the loosening of regulations in the care sector.”

Derek Lewis, chairman at the Royal Mencap Society, added: “As the government well knows, the critical issue for providers of vital sleep-in care for those with serious learning disabilities, is the unfunded liability for six years’ of back pay. This arises out of the government’s change in guidance on the application of the national living wage, coupled with aggressive HMRC enforcement action.

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“The announcement of a brief two-month stay in enforcement action is welcome, as is the assurance that penalties will not be levied on top of the back-pay liability but neither addresses the catastrophic impact of the £400 million back pay bill across the sector on providers, people with learning disabilities and care workers in one of the most vulnerable sectors of society.

“Employers are keen to fulfil their responsibilities to employees. But if the government changes the rules on how sleep-in payments should be paid it must expect to have to pay for the changes. We reiterate our call to government to accept its responsibility and make an urgent commitment to fund the back-pay bill, for the sake of those vulnerable people who depend on this care and for the dedicated people who provide that care. Time is running out.”