Newsflash: Sleep-ins and National Minimum Wage enforcement

The Department for Business, Energy and Industrial Strategy (BEIS) has today announced that enforcement in relation to the National Minimum Wage (NMW) for sleep-in shifts in the social care sector will be temporarily suspended.

This comes shortly after the recent Mencap case that held that sleep-in shifts were ‘time work’ and so counted towards the minimum wage (see our blog, ‘Sleep-ins – should they form a part of the National Minimum Wage calculation?’).

Today’s announcement was that the government will:

  • waive historic financial penalties owed by all employers who have underpaid their workers for overnight sleep-in shifts before 26 July 2017; and
  • temporarily suspend HMRC enforcement activity in relation to the payment of sleep-in shifts by social care providers until 2 October 2017.

The waiver applies to the penalties levied for failure to comply with the NMW regulations, and applies to all employers. It does not affect the employer’s liability to repay any arrears of pay to the worker due to historic underpayments. During the suspension – which only applies to employers in the social care sector – BEIS will also consider what further action it needs to take to support the care sector, taking into account the need to protect workers. Among the key issues to be resolved will be what happens with the arrears of pay, and how social care providers can meet their obligations in future. The government has acknowledged that in certain cases, employers will be unable to meet their obligations to repay the underpayments to their staff.