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The National Minimum Wage for sleep-in shifts

Most of you are probably aware that when a PA is required to sleep at a service users home and required to remain on site that every hour will be considered time-work and therefore should be paid at or above the NMW regardless of whether the employee is awake or asleep.

This presumption relates directly to decisions reached by the Employment Appeals Tribunal (EAT), namely, Whittlestone in 2014 – and more recently Focus Care  In both cases employed carers successfully argued they had been underpaid for sleep-in shifts because time spent asleep had not been accounted for as work time.  The Carers argued it should have been and the EAT agreed.  Subsequent HMRC enforcement has also relied on this premise.

Neither of the above cases involved an individual employer on Direct Payments.  However, the principle still applies, if a PA works a night shift and cannot leave the premises because they might be needed to work at any point, every hour should be paid at or above the NMW.

Most Local Authorities and CCG’s have already amended care budgets to accommodate this and eliminate the risk but it is likely that they are some employers managing their budget perhaps unaware of the recent rulings and the potential consequences.

Legal Remedies

If a PA feels they have been underpaid on account of the above they could make a claim in an Employment Tribunal (ET).  This would be submitted as an ‘unlawful deduction from wages’ claim for which they could claim a maximum of 2 years underpayment.

Assuming the employer has an employer’s liability insurance policy in force we would strongly recommend they contact them for support as soon as they are aware of a potential claim.  An adviser from the insurance company will then check all the details and provide assistance to quantify any liabilities and bring about a settlement.

They will not assume an underpayment without checking the details of each case.

Advice before a dispute situation

When the insurer receive calls now, (in some cases) before the employee is even aware that there has been an underpayment, the approach taken is to avoid a dispute from arising. To do this the first step is to correct the underpayment system that it is in existence immediately.

The insurer will not automatically advise that a back payment is made.

Keeping in mind that in order to bring a claim to an Employment Tribunal the employee only has three months to do so from the last underpayment in a series, it make sense to make the change immediately and effectively start the clock on the time frame within which any claim can be brought (3 months). If the case is not issued (or a dispute registered with ACAS) within three months of the change taking effect and the employee still wanted to pursue a claim they would be forced to issue proceedings in Civil Court.

In this case an employee can go back as far as six years.  However, the Court system incurs costs and dependent upon the value and complexity of the claim may require the Claimant to obtain legal representation or risk their claim failing.

It is probably less likely that an individual PA will make a claim of this nature via the Civil Court but it cannot be discounted entirely when assessing the risk to employers.

HMRC enforcement & Social Care Compliance Scheme

Penalties for underpayment of the NMW may also arise as enforcement action from HMRC. HMRC has responsibility to publish information on any employer who is caught underpaying NMW and the financial penalty may be up to 200% of the underpayment!

Due to the potential hardship that such high penalties may cause to the social care sector, the Government have recently introduced the Social Care Compliance Scheme which provides employers more scope and time to get the underpayments paid to relevant employees before penalties are issued.

Employers in the social care sector who have underpaid staff in this way, including direct payment employers, are advised to register with the SCCS. Having done so, the employer is afforded up to twelve months to carry out an assessment of their worker’s entitlements to back pay and then a further three months from submission of the declaration to HMRC to make the underpayment to the employee.

Further guidance can be found here –

Mark Bates Ltd’s legal experts (MSL) recommend that where there has been an underpayment that cannot be rectified immediately the employer should register with the scheme.   Once in the scheme employers will be afforded time and support from the HMRC to quantify any underpayment and repayment plan.  Direct Payment employers they will then need to liaise with their Local Authority or CCG to for further assistance.


David Ashley ILG Co-Founder & BDM @ Mark Bates Ltd