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National minimum wage and ‘sleepover’ care

Brief background

The Employment Appeal Tribunal has given judgement, in a group of cases heard as a collective appeal, on the issue of care workers’ sleep-in shifts and the National Minimum Wage (NMW).  The three cases all focused on the issue of whether a carer performing a sleep-in shift was working during the shift and therefore whether they were entitled to receive the NMW.

This is an important issue for the care sector as the affordability of paying NMW per hour for every sleep-in shift performed (rather than a fixed allowance for the whole night, which is adopted by many care sector organisations) is problematic.

In considering the three appeals before it, the Employment Appeal Tribunal concluded that hours during sleep-in shifts can, in certain circumstances, be taken into account in calculating whether the average hourly rate is less than the NMW.

Social Care Compliance Scheme (SCCS)

On 1 November 2017, HM Revenue & Customs (HMRC) introduced the  Social Care Compliance Scheme (SCCS).

The scheme is aimed at all employers in the care sector who may have inadvertently underpaid their workers for ‘sleep-in’ shifts.  It includes individual employers who have taken on their own carers or personal assistants.

Overview of the scheme

Employers need to check that they are paying their workers at least the NMW, on average, for the time worked across each pay reference period.  Employers may have underpaid their workers if they haven’t included any hours worked during overnight shifts where they can sleep on the premises (sleep-in shifts).

HMRC advises employers to contact them if they need help in deciding if their workers are ‘working’ during sleep-in shifts.

If employers think that they have paid their workers less than NMW, they can apply to join HMRC’s SCCS. If they are accepted onto the scheme and fully declare any underpayment, they won’t: (a) have to pay the financial penalty, currently 200% of the amount they owe to their workers, up to a maximum of £20,000 per worker; or (b) be publicly named for underpayment of NMW.

Businesses are classed as employers if they provide personal care and other practical assistance for children or adults to help them live independently or improve their quality of life. This can be for reasons of age, illness, disability, pregnancy, childbirth, dependence on alcohol or drugs, or any other similar circumstances.

If you personally pay someone to provide your care you will also be classed as an employer.

HMRC provides guidance to care workers on what they should do if they think they’ve been paid less than the NMW by their employer.

 Who can join the scheme

 Someone can apply to join the scheme if they are a care employer who provides sleep-in shifts. Applicants should be one of the following:

  • an employer (e.g. care agencies);
  • an individual who funds their own care;
  • a person who receives money to fund their own care (such as through a direct payment, social care personal budget or personal health budget);
  • a representative of one of these can also use the scheme on their behalf.

The scheme is NOT open to anyone who has been prosecuted for underpayment of the NMW.   Nor to anyone who has previously declined an invitation from HMRC to join the scheme.

Applications will be accepted at HMRC’s discretion.

Anyone who funds their own care, or receives money to fund their care, can contact HMRC if they need support.

How to join the scheme

Someone can apply to join the scheme through the following ‘portal’ on the Government’s main website:

If an employer has a Pay As You Earn (PAYE) reference number or a Unique Taxpayer Reference (UTR) number, these details will be needed to complete the online form.

The deadline to join the scheme is 31 December 2018.

Once someone has joined the scheme

 When employers have been accepted into the scheme, they must:

  • review the amount that they’ve paid their workers – HMRC will assist with this process;
  • return the declaration form, usually within 12 months of receiving it, or by 31 December 2018 if sooner;
  • pay workers for any underpayment for sleep-in shifts, usually within three months of returning the declaration or by 31 March 2019, whichever is soonest;
  • pay workers any other NMW underpayments discovered before returning the declaration form; and
  • pay any additional tax and National Insurance contributions that result from any underpayment;
  • make sure workers are paid at least the NMW for time worked during sleep-in shifts from the point underpayment is discovered; and
  • keep records of how a decision was reached that workers had been underpaid and how the amount owing was calculated.

 HMRC contacts

 HMRC has set up a dedicated Social Care Compliance Scheme Team, who can be contacted by telephone on 0300 123 4494 (8am to 4pm, Monday to Friday) for

  • further information about the scheme;
  • help deciding if workers are working during a sleep-in shift; and/or
  • support calculating any underpayment.

HMRC Comments

HMRC has advised that:

  • retrospection will be applied for six years from date of receipt of application to join the scheme and
  • for someone who receives money to fund their own care (such as through a direct payment), HMRC’s only concern is whether such individuals ‘make good’ NMW underpayments to the carers that they employ and/or have employed.  HMRC has no interest in whether relevant ‘employers’ can secure reimbursement of such monies from funders.

HMRC is in the process of compiling a Q&A document on this subject.  Once it is published a copy will be available through SIA’s website.

 What next?

If members have any questions on the matter they are urged to contact HMRC’s dedicated team on 0300 123 4494 (8am-4pm Monday to Friday).