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Social care sector threatened as UK government sets deadline to settle bill for sleep-in shifts

Out-Law News | 06 Nov 2017 | 4:55 pm | 2 min. read

The UK government has launched a compliance scheme for social care providers that may have incorrectly paid workers below legal minimum wage hourly rates for sleep-in shifts.

Social care employers who opt into the new Social Care Compliance Scheme will have a year to identify what they owe to carers who are on duty overnight and may have been underpaid for those shifts. At the end of the review period, employers will have up to three months to pay any arrears, although the final deadline will be 31 March 2019.

Employers who choose not to opt in will be subject to HM Revenue & Customs' usual enforcement procedures.

Social care expert Matt McDonald of Pinsent Masons, the law firm behind Out-Law.com, said: “On the face of it the introduction of a scheme which allows employers to put all their cards on the table without fear of additional reprisal is to be welcomed. However, this approach doesn’t address the fundamental issue for care providers, which is how to fund the back pay liability that they face. The liability is hugely significant for the vast majority of providers, with a number declaring that their very existence is threatened.”

“I doubt very much we have heard the last on this issue as care providers and MPs will continue to pressurise the government into providing financial assistance with the back pay liability,” McDonald said.

Earlier this year the government waived penalties for sleep-in shifts underpayment arising before 26 July 2017, in response to concerns over the impact which financial penalties and arrears of wages could have on the viability of social care providers. Enforcement action for sleep-in shifts in the social care sector was temporarily suspended between 26 July and 1 November 2017.

In a document published this month (26 page / 388KB PDF) setting out how the government enforces the national minimum wage, the Department for Business, Energy & Industrial Strategy confirmed that sleep-in shifts can count as work for which the wage is payable.

While acknowledging government guidance in the past “was potentially misleading”, the document said court and employment tribunal judgments had clarified the position on what constitutes work in connection with sleeping time, and noted that a recent judgment set out that a “multi-factorial approach” should be adopted for assessing individual sleep-in cases.

Learning disability charity Mencap chairman Derek Lewis said the government appeared “ready to sacrifice the well-being of some of the most vulnerable members of society and place at risk the jobs of people who are among the lowest paid”.

Mencap said the “devastating” liability for back-paying the minimum wage amounted to £400 million, and added that many local authorities were refusing to fund the increased cost of sleep-in shifts in the future.

In the Spring Budget, chancellor Philip Hammond pledged an additional £2 billion in funding for social care. Healthcare expert Joanne Ellis of Pinsent Masons said the extra funding was a “sticking plaster” which did “not address the need for long-term funding and reform”.

A week after the Budget, it emerged that care providers had cancelled social care projects in 95 local authorities in response to cost pressures. Ellis said the business model for many providers was no longer sustainable.