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Social care providers face further cost pressures following a Judgment on Sleep in Allowances

Deborah Hely partner, employment and pensions group, with DAC Beachcroft LLP

An employment appeal tribunal has decided that care workers employed by Mencap and required to sleep in at a service user’s home are entitled to be paid the National Minimum Wage (NMW) for all hours worked, including the hours spent asleep. Mencap has been given permission to appeal but, Unison who represented the workers has indicated that Mencap have now agreed to pay an average of the NMW for all of the hours worked on a sleep in from April 2017.

Wage costs may now need to increase for many providers and there could be claims for back pay dating back up to six years. Failure to pay carries criminal penalties and fines, including the potential for doubling back pay arrears.

In the Mencap case the care worker was employed to sleep at a service user’s home in order to be available to assist if an incident occurred. The onus was constantly on her to use her professional judgment to decide if she needed to intervene.. She was paid a flat rate of £29.05 for the nine hours she was on shift. The NMW regulations state that all workers must receive the NMW as an average for all hours worked.

The Judge found that the care worker was entitled to be paid an amount equivalent to the NMW for the whole period she was on shift, including when she was asleep.

The law is still far from clear. The judge commented that there is no one single factor that will decide these cases and that employers have to look at several issues, including, are the workers:

  • there to comply with a legal or contractual requirement?
  • restricted, for example would the worker be disciplined if they left the premises?
  • responsible to take action?
  • required to act immediately if action is required?

A separate case heard alongside the Mencap appeal involved another care worker, there in order to fulfil the Care Quality Commission requirement to have enough suitably qualified, competent and experienced staff present. There was a waking worker at night who was paid for all hours worked, and a sleeping worker who was paid a £25 allowance each night and not for the hours they were asleep.

The judge commented that just because the sleeping worker was required to be at the premises all night did not mean they were entitled to the NMW when they were asleep. However, in this case the judge did not make a finding as there was insufficient information to apply the test referred to above.

There are steps providers can take to minimise the cost. If a care worker is paid more than the NMW per hour for day work, for example, providers could increase the total payment so that the average hourly rate matches the NMW, but that would involve effectively dropping the hourly rate for day work in order to subsidise the sleeping shifts.

Some providers are asking local authorities to pay more. But many local authorities have structured contracts with no provision for the payment of sleeping time and say they can’t afford to pay more.

The Care Act requires local authorities to “promote the efficient and effective operation of a market in care and support services”. Its statutory guidance provides that local authorities should seek evidence that “service providers deliver services through staff remunerated so as to retain an effective workforce” and that “remuneration must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary”.

Deborah Hely partner, employment and pensions group, with DAC Beachcroft LLP



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