Charlie Barnes

Written by: Charlie Barnes

Charlie Barnes

Associate Director

Sleep-in shifts and National Minimum Wage – update

Since our last blog, on 1 November, the Government announced a new scheme for social care providers to opt into if they may have underpaid care workers for sleep-in shifts. The scheme gives them 12 months to establish what they owe to workers with guidance from HMRC’s NMW enforcement team. At the end of the scheme they will have three months to pay whatever NMW underpayments they discover and HMRC will not take any enforcement action against them.

Whilst HMRC will be writing to those providers who already have a NMW complaint against them to notify them of the scheme, those who don’t have a complaint but believe they may have underpaid NMW for sleep-in shifts are being encouraged to opt into the scheme now. If they don’t, they risk enforcement action being taken against them which could mean financial penalties of up to £20,000 per worker and being named and shamed.

Clearly the Government has to address the issue of reimbursing workers for any underpayment of NMW. However, social care providers who relied on HMRC’s guidance may feel some sense of injustice as they are currently still accountable for any underpayments of NMW despite the launch of this scheme. With some estimating the total NMW underpayment in the sector to be up to nearly £400 million, some providers could be teetering on the brink of insolvency putting the welfare of the vulnerable adults in their care at risk.

In its latest announcement, the Government has confirmed it has opened discussions with the European Commission to determine whether any state aid to social care providers would require EU ratification. As it stands though, there is still no firm commitment from the Government on whether it will provide such financial support.

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