Government acts to alleviate pressure on care providers

28 July 2017

The care sector has been facing unprecedented pressures over recent years, compounded by a series of tribunal decisions that’s found that care workers who do ‘sleep-in’ shifts are entitled to be paid the National Minimum Wage for these shifts – rather than a fixed allowance which had been common practice previously.

This has led to care providers facing not only substantial claims for back pay, but also penalties imposed by HMRC of 200% of the arrears owed – up to a maximum of £20,000 per worker.

It was estimated that this could cost the sector around £400million and threatened to put many care providers out of business – potentially causing a collapse in social care provision.

The government’s measures

Following intensive lobbying, the government has now acknowledged the unique pressures facing the sector and has put two exceptional measures in place to alleviate these burdens.

The first measure is a waiver of financial penalties owed by employers who have underpaid their workers for sleep-in shifts prior to 26 July 2017.

The second measure is a temporary suspension of HMRC enforcement activity relating to the underpayment of sleep-in shifts. This temporary suspension will remain in place until 2 October 2017.

These measures do not affect care providers’ liability for arrears of pay. The government statement announcing the move makes it clear that they remain “equally committed to making sure workers in this sector receive the minimum wage they are legally entitled to, including historic arrears.”

A word from us

Andrea O’Hare, Director of Employment Law and HR Services at Citation, welcomes the measures, but commented: “Care providers are still being held liable for payments for sleep-in shifts when this has not been factored into commissioning fees.

“This leaves care providers footing the bill for significant arrears of back pay, and setting aside HMRC penalties will still leave them with significant potential liabilities.”

The Government has vowed to continue working with representatives in the social care sector to ensure the delivery of care is minimally impacted and that the action taken to protect workers is “fair and proportionate.”

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