
Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
Background
As most providers will be aware for many years and, in particular, since late 2013, there has been much confusion over the legal requirements to ensure that workers are being paid the appropriate wage for sleep-ins.
The most recent cases, however, in particular, Tomlinson-Blake v Royal Mencap Society (EAT April 2017), decided that where a care worker is doing time/salaried work, even when they are asleep and waiting to work, they are in fact working. Those decisions have been reached primarily on the basis that in those cases there was a requirement for the workers to be at their place of work and they could not come and go as they please, and therefore their time asleep was deemed to be working time. Being present at the place of work was determined, of itself, to be work.
In contrast, as some providers who had been inspected by HMRC will be aware, before summer 2016 HMRC appeared to take a clear and consistent view that it was only the time spent awake and working during a sleep-in shift that would count for National Minimum Wage (NMW) purposes. However, this approach changed, and HMRC now takes the view that every hour of a sleep-in counts where:
Today’s announcement
Following months of lobbying from the social care sector, the Government this morning announced the following:
There are a number of ways employers may want to manage compliance going forward:
Social care sector
The Government will continue to work with representatives from the sector to find a way to minimise any impact on the provision of social care as a result of this situation. To allow this work, the Government will temporarily suspend any enforcement activity regarding “sleep-in” shifts until 2 October 2017. This suspension is temporary, and its purpose in light of the other announcements, namely that employers remain liable for the payment wage arrears for the period before 26 July 2017 is unclear. We understand that this period of suspension will be used to see how the issues of NMW and sleep-ins are managed going forward.
Today’s announcement fails to reference the underfunding and commissioning practice that is the core reason why providers are unable to pay NMW for sleep-ins. We hope that Ministers will address this issue as part of the ongoing conversations. This stay on enforcement action reflects what was already becoming apparent from HMRC practice. We have been arguing for many clients that enforcement action would potentially be unlawful and susceptible to challenge in the Employment Tribunal and by way of judicial review. We have had no well-reasoned response to the points we have raised. It remains to be seen whether inspections and ongoing enquiries with providers will continue whilst enforcement action is stayed, but we suggest providers argue that no action takes place ahead of any further announcements.
How else can we help you?
At Anthony Collins Solicitors LLP we have a team of NMW experts that have experience of, and can assist with:
Further information
For further information and assistance with any NMW issues or HMRC inspections, please contact Anna Dabek, Matthew Wort or your usual contact in our employment team.
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