Click here for the guidance: Calculating the minimum wage

The standard approach to sleep in shifts across the care sector is to pay a flat rate for a sleep in shift, rather than pay an hourly rate for each hour of the sleep in shift.  This is because providers consider the requirements on staff are much less than on their staff who might be required to work a “waking night”.

In relation to time work the updated guidance provides that when addressing whether the time spent asleep counts for minimum wage purposes “it will depend on the nature of the work related obligations to which the worker is subject while asleep”.  The guidance highlights that where there is a statutory requirement for the worker to be present or they would be disciplined if they left, that the time will count as working time for time work purposes.  The guidance now includes a specific example of a worker in a care home who is required to be there “for health and safety purposes” although they are entitled to sleep.  It provides they are likely to be working for the whole of the overnight shift, even when they are asleep.

Whilst this guidance doesn’t have any statutory authority in our view it does broadly reflect the case law on time work as it currently stands.  However, we do not consider the case law reflects the intention of parliament when they introduced specific sections dealing with sleeping arrangements into the NMW legislation.

NMW compliance is calculated by taking into account relevant earnings within a pay reference period and calculating the average hourly rate received.  For some providers, depending on the number of sleep in shifts their staff work in a pay reference period, if the sleep in shift is treated as time work, they may not be paying the NMW.  Providers will therefore want to seek to persuade those who commission their services to increase the amount they are paid to deliver sleep in shifts.  Providers will be able to remind local authority commissioners of their obligations under the Care Act and the new statutory  guidance on the Care Act which makes clear their obligations to ensure providers pay the NMW. The guidance and case law is creating a significant additional financial burden on the care sector and it is in both providers' and commissioners' interests to find a solution to this issue.

As the law currently stands, the only alternative approach is for providers to look to position the sleep in arrangements as unmeasured work and put in place a daily average agreement to agree the daily average amount of hours worked during a sleep in.  This builds on Court of Appeal case law in the case of Walton v Independent Living Organisation.  This approach is not risk free as the case law on time work contradicts the case law on unmeasured work.

We have extensive experience of advising providers on their sleep in arrangements and defending challenges regarding NMW compliance in both the Employment Tribunal and HMRC inspections.

For more information

Please contact Matthew Wort on 0121 214 3501 or to discuss these issues further.