By Andrew Young-
Andrew YoungThe Uk government has been heavily criticized for delaying its decision about whether it will finance support care providers in paying owed sleep-in payments to care staff by a further month.
During this time, until the beginning of November, providers will not be subject to enforcement by HMRC for not paying the minimum wage to staff on sleep-in shifts. HMRC will not compel its providers to enforce demands for learning disability charities to back-pay overnight workers the national minimum wage in July while the government engages in talks with the sector.
This halt in enforcement was originally due to finish on October 2nd until the government yesterday announced it would extend this for another month as talks continue.
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The government has said the decision would “minimize disruption” to the sector while it decides whether the industry needs further support. This could involve the government providing the sector with money to fund back pay though any such support would need to comply with European Union rules on state aid to private organisations.
A statement from the UK government reads: “Today’s announcement will allow the government to establish how providers’ back pay bills will affect vulnerable people’s care. The evidence base will also ensure any intervention is proportionate and necessary and could be required to satisfy EU State aid rules on government funding for private organisations. “During this temporary pause, the government will develop a new enforcement scheme for the sector to encourage and support social care providers to identify back pay owed to their staff. This will help to minimise the impact of future minimum wage enforcement in the sector while seeking to ensure workers receive the arrears they are owed.
TRIBUNAL
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The issue of backdated payments for employees of care providers doing sleep-in care arose following an employment tribunal in May. The tribunal ruled that workers were entitled to the national minimum wage for sleep-in hours, rather than a fixed rate.
Royal Mencap Society chairman Derek Lewis said in a statement: “It is deeply disappointing that, after many months of review and consideration, the government is still not able to announce any decision on the provision of support for care providers faced with a £400m back pay liability as a result of changes in government guidance on payments for sleep-ins. “The further delay will mean that people with a learning disability, their families and carers are subjected to yet more uncertainty and anxiety, while providers will be forced to delay essential investment, and local authorities will struggle to persuade providers to take on new contracts.”
WORRYING
The Voluntary Organisations Disability Group chair Steve Scown said: “The decision to pause is worrying as for each month that goes by providers are continuing to work with a potential unknown back pay bill with no clear indication about future funding arrangements.” “We call on government to step up the pace. We need a common sense pragmatic solution that enables colleagues to be paid their dues without employers being made bankrupt.”
After the tribunal, the government waived historic fines for providers found not to have paid staff the minimum wage for sleep-in shifts up to 26 July 2017.
The government also suspended HMRC from enforcing back pay and the minimum wage in the care sector for sleep-in shifts until October 2nd, whilst it works out what impact it could have on the stability of social care. This suspension has now been extended for a further month.
Charities are convinced the tribunal ruling could leave care providers needing to find £400 million to pay staff for backdated payments over the past six years, while also leaving a £600 million funding gap for payments over the next four years.
The government said the one-month delay would allow it “to establish how providers’ back pay bills will affect vulnerable people’s care”.
“The evidence base will also ensure any intervention is proportionate and necessary and could be required to satisfy EU State aid rules on government funding for private organisations,” the statement said.
“During this temporary pause, the government will develop a new enforcement scheme for the sector to encourage and support social care providers to identify back pay owed to their staff. This will help to minimise the impact of future minimum wage enforcement in the sector while seeking to ensure workers receive the arrears they are owed.”
Glen Garrod, vice president of the Association of Directors of Adult Social Services (ADASS), welcomed the extension, and said any retrospective claim would “seriously threaten” the care market’s sustainability.
“Any potential retrospective claim could severely impact on the care of thousands of older and disabled people and amplifies the overarching need for an urgent, long-term solution to the sustainability of the care market, and a speedy, fair and consistent solution to the issue of sleep-in payments that is fully funded by government. We would welcome clarity and a resolution of the situation as soon as possible.”
Mencap, the charity at the centre of May’s tribunal ruling, said the government’s announcement was “disappointing”.
Derek Lewis, chairman of Mencap, said the delay would leave service users subjected to “more uncertainty and anxiety” as providers were forced to delay essential investment and local authorities struggle to convince providers to take on new contracts.
“It is nevertheless encouraging that the government appears to accept the need to support the sector in dealing with the £400 million back pay liability. It remains essential that the sector receives full funding for this liability to avoid unacceptable harm to people with a learning disability and insolvencies among providers.”
Unison general secretary Dave Prentis said the extension was a “green light for dodgy employers to carry on paying illegal wages without fear of ever being punished”.
“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,” he said.
“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.”
Martin Green, chief executive of Care England, said: “We will continue to work with the government during this extension period with the aim of seeing back pay liability fully funded. However, we must see this issue resolved and are disappointed that the government has not yet made a decision. We also need clarity on the future and how it will be funded. Providers and the people they care for need certainty”.
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