Minimum wage for ‘sleep-in’ shifts – update

The Government have announced that they will temporarily suspend minimum wage enforcement activity and will waive historic financial penalties against employers concerning sleep-in pay.

Background

Recent case law has seemingly established that in some instances it could be appropriate to pay a care worker the minimum wage even though they are asleep. You can read more about the rules on sleep in shifts, and about the minimum wage more generally, in our website guidance.

This is essentially a reinterpretation of the National Minimum Wage legislation and applies retrospectively, although it should be remembered that cases in this area tend to be very fact specific.

It is worth noting that similar decisions have previously been reached, as have others that have been apparently contradictory, leading to widespread confusion. In addition, it seems that Government guidance ‘Calculating the National Minimum Wage’ was not necessarily updated to reflect the correct position, leading to different approaches being taken. 

The correct position is now reflected in the latest guidance issued by the Department for Business, Energy and Industrial Skills and indeed, HM Revenue and Customs have been actively investigating social care providers for underpayment of sleep-in shifts. This has received much media coverage.

This has huge ramifications for already stretched, largely government funded, social care providers, (which include charities) in terms of the combined impact of financial penalties and arrears of wages. It may also impact individual care and support employers where their workers provide them overnight support.

Announcement

Taking into account these concerns and the circumstances of care and support employers, the Government have announced that:

  • They will waive the financial penalties faced by employers who are found to have underpaid their workers for “sleep-in” shifts (although not the arrears themselves). The waiver is to apply to any penalties resulting from “sleep-in” shifts that took place before 26 July.
  • To allow the Government to try and find a solution here, they will adopt a policy of temporarily suspending enforcement activity of “sleep-in” shifts. This suspension will apply until 2 October 2017.

The Government’s announcement refers to these measures applying to social care providers only, however we assume that this also includes care and support employers and will endeavour to confirm this with our contacts at HMRC as soon as possible.

(31-07-2017)