Minimum wage – counting the cost for care providers

With the announcement in the autumn budget of an £3million increase in HMRC’s budget for enforcing the law on the minimum wage, and an adult social care provider ‘named and shamed’ along with 36 other firms this month for having failed to pay the required wage, now may be a time for other providers to review their own pay structures and ensure that staff are receiving what they’re entitled to.

The health and social care sectors, faced with increasing demand from an aging population and required to provide care where and when it is needed, have a high proportion of staff required to be on call or available for set periods, and who may need to travel significant distances to provide care. While there are a number of rules on what time can be taken into account when calculating whether an employee has received the hourly minimum wage, the following points are important:

• Travel time between work locations is counted for the purpose of assessing whether a worker’s pay reflects the time spent on the job. A care worker travelling between a number of service users should be paid for the time spent travelling – not just for the time they’re actually with the service user. Time spent travelling to and from work is not counted.
• The time actually spent working must be paid – not just the time the employer allocated to the task. As many service users have multiple and more complex needs, care provision can overrun the time allocated. Providers should actively monitor how long staff are working and make sure that their pay reflects the time being spent.
• Where staff are required to be on standby and at or near the workplace, they are entitled to be paid for this time. This is of particular importance with residential care, where overnight care needs to be available. Again, making sure the time on-call staff spend providing care is recorded will help ensure that minimum wage legislation is complied with.

The social care provider identified this month as having breached the legislation underpaid seven of its employees amounts totalling £613.79 (HMRC website). Care providers have difficult choices to make. With the BBC reporting this week that spending on care for those over 65 has fallen by 20% in the last decade, a promise from Labour to increase the maximum fine for non-compliance to £50,000 if elected, and HMRC vowing to publicly name and shame employers found to be in breach, early efforts to comply may well save care providers from significant adverse publicity, as well as from significant extra costs.

If you have any concerns about the issues raised here, please feel free to contact a member of Hempsons’ employment team.

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