Govt extends minimum wage ‘amnesty’ for care work providers

29 September 2017

The government has extended its suspension of minimum wage law enforcement for social care providers, leaving low-paid workers unable to access the money they are owed.

Five years ago, a tribunal ruled in the case of Whittlestone v BJP Home Support that care workers’ overnight shifts should be paid at minimum wage. Despite this, thousands of workers continue to receive a flat rate of £2.50-£3.50 an hour for sleep-ins. In 2016, HMRC began to enforce this aspect of the law, but in July 2017, the government agreed to an ‘amnesty’ for the thousands of employers who owe their staff back pay as a result, following representation from employers that to compensate workers would break the back of the industry.

Yesterday (28 September 2017), the government announced that this policy would be extended for one more month.

Although the government released a statement to say its expectations remain that “all employers pay their workers according to the law, including for sleep-in shifts”, evidence in our newly published report 8 Good Reasons Why Adult Social Care Needs Sectoral Collective Bargaining shows that thousands of employers continue to underpay their staff minimum way.

The government has said it will develop a new enforcement scheme during the amnesty period to “encourage and support social care providers to identify back pay owed to their staff”, with further details to be outlined next month.

The Institute of Employment Rights recommends the government promote and support sectoral collective bargaining between social care employers’ associations and trade unions to establish an agreed upon set of standards to be applied across the industry.

Dr Lydia Hayes, Law Lecturer at Cardiff University, expands on these proposals and why they are needed in our latest publication 8 Good Reasons Why Adult Social Care Needs Sectoral Collective Bargaining.

Commenting on the government’s announcement, General Secretary for Unison Dave Prentis said: “Penalties are needed to make sure unscrupulous bosses abide by the law. But this extended amnesty is a green light for dodgy employers to carry on paying illegal wages without fear of ever being punished.

“In the absence of fines or the public shaming of any firm found guilty of poverty pay, the UK’s minimum wage law is being seriously undermined.

“While there may be some sympathy for charities who owe their sleep-in staff money for not paying the minimum wage when they should have been, many care providers are private equity-backed companies that can well afford to pay up.

“No government or employer should be above the law. By suspending enforcement, we have grave concerns ministers may well have been acting unlawfully and using powers they don’t have.

“It’s time ministers got tough with the minimum wage cheats, gave low-paid care staff a decent pay rise and put more money into the care sector.”