16 October 2017
As you’re probably already aware, following the outcome of the ‘Mencap case’, care providers warned the government that HMRC’s current enforcement action in relation to sleep-in shifts risked bankrupting the sector.
In response, the government temporarily suspended enforcement activity over sleep-in shifts in the social care sector until 2nd October 2017.
At the end of September though, the government announced it would extend the suspension by one month. During this extension period, they plan to publish revised guidelines on their approach to National Minimum Wage (NMW) enforcement in the social care sector.
This suspension of enforcement action is in addition to the government’s previous announcement, where they waived any penalties for arrears of NMW (but not the NMW arrears themselves) from any shifts that took place before 26th July 2017.
The judge in the Mencap case identified a number of potentially relevant factors that care providers should consider when determining whether or not a worker should receive NMW for the entire period of a sleep-in shift. These are:
1. The purpose of the worker’s presence. For example, if you have a regulatory or contractual requirement to have someone present, this might indicate whether and the extent to which a worker is “working” by simply being present.
2. The extent to which a worker’s activities are restricted in relation to the requirement to remain on the premises throughout the shift “on pain of discipline if he or she slips away to do something else”. So, for example, can they pop out to the cinema or nip to the shop? And if they did, what would the knock-on effect be?
3. The degree of the worker’s responsibility during the sleep-in shift. This can range from workers who are required to sleep at the premises in case of a break-in or a fire, to workers who are needed in a home for the disabled. The latter would have a greater personal responsibility in terms of the duties they may need to perform during their shift.
4. The immediacy of the worker’s requirement to provide services. So is the worker the person who decides whether to intervene and then intervenes themselves when necessary? Or are they woken as and when needed by another worker, where the other worker would have the immediate responsibility for intervening?
Every case will have its own unique set of circumstances. As such, the weight each of the above four factors carries will vary on a case-by-case basis, meaning none can be categorised as a deciding factor.
One thing that is clear, however, is that HMRC are classing care sector sleep-ins as working time whenever an employee forms part of the care ratio and/or are not permitted to leave the premises.
As a result, employers need to ensure that all employees undertaking sleep-in shifts receive sufficient pay to comply with the NMW Regulations.
If your business is still paying a sleep-in allowance, there are several options available to you:
Currently, HMRC’s interpretation of the NMW Regulations suggests that ‘allowances’ should be excluded from pay when calculating the NMW. Because of this, as a precautionary measure, we would strongly advise that you amend any references of ‘sleep-in allowance’ to ‘sleep-in payment’ to avoid any ambiguity.
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If you’re a Citation client and need any advice or support on anything we’ve discussed, please get in touch with our HR Support Managers (Malcolm Hill or Megan Mulholland) on 0161 413 0130 or firstname.lastname@example.org.
If you’re not already a client, please get in touch on 0345 844 1111 or email@example.com.
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