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Update – National Minimum Wage and Sleep In Shifts in the Social Care Sector
The issue of minimum wage compliance for sleep-in shifts has been a thorny one for many social care providers for some time. However, following recent case law (in particular the Focus Care case), it has become clear that the general practice of paying a modest shift allowance for sleep-in shifts (rather than paying the minimum wage for each hour) may break the law.
Earlier this year, the government temporarily suspended enforcement action concerning sleep-in shifts in the social care sector to minimise disruption. This was due in part to concerns over the impact that financial penalties and arrears of wages were likely to have on social care providers. However this temporary suspension has now been lifted and replaced by a new scheme, the Social Care Compliance Scheme (SCCS).
The SCCS is to assist social care employers who may have underpaid workers for sleep-in shifts. Most social care employers will be able to opt in to the scheme, which will allow them up to a year to conduct a thorough self-review to identify any arrears owed to workers, with support and advice from HMRC. Employers will then need to repay any wage arrears within three months of the end of the review period.
Employers may voluntarily join the scheme and HMRC will also write to employers who have a pending complaint for underpayment of wages with an invitation to voluntarily join. Employers who opt in to the scheme will
· not face the normal enforcement approach from HMRC;
· be given support and advice by HMRC;
· be given further time to pay any arrears; and
· not face any financial penalties for underpayments or be publicly named (provided all arrears are paid within the period of time allowed).
Regardless of when an employer enters the SCCS, the deadline for repaying arrears to workers will not be later than 31 March 2019.
Employers who decide not to opt-into the scheme will not be offered any further concessions. They will be subject to the full HMRC investigative process – including financial penalties, public naming and possible prosecution where appropriate.
Bear in mind that opting in to the SCCS will not stop employees from pursuing individual claims against you for arrears, which can go back up to six years.
It is important to check that you are paying your workers at least the National Minimum Wage, on average, for the time worked in each pay period. There is a risk of an underpayment if you have not included hours worked during sleep-in shifts. Financial penalties can be up to 200% of the amount you owe your employees (up to a maximum of £20,000 per worker). If you need assistance in calculating minimum wage compliance or in formulating a strategy to deal with any underpayments identified, please contact our specialist team of Employment lawyers on 01392 207020.