HMRC waives national minimum wage penalties for sleep-in shifts

Elderly care

HMRC will waive penalties for national minimum wage (NMW) arrears owed by social care providers to workers on sleep-in shifts that took place before 26 July 2017. In addition, it will suspend enforcement activity over such shifts in the sector until 2 October 2017.

HMRC’s investigation into the underpayment of workers on sleep-in shifts stems from two tribunal rulings that such workers should be paid the NMW for those hours instead of a lower flat rate.

Nevertheless, the government acknowledges that versions of its Calculating the National Minimum Wage guidance published before February 2015 may have been misleading in this area. This is why it has decided to waive penalty fees for social care sleep-in shifts that took place before 26 July 2017. From 26 July 2017 onwards, however, underpayments for such shifts will attract the usual penalties of 200 per cent of the arrears owed capped at £20,000 per worker.

The suspension of enforcement activity until 2 October 2017 applies only to employers in the social care sector and is intended to allow the sector to adjust to the new rules.

Is your business accidentally paying below the minimum wage?

The Employment Appeal Tribunal has recently given practical guidance in a number of conjoined cases, to help employers determine whether workers who sleep on premises are entitled to the NMW. What is clear is that specialist legal advice should be obtained to ensure compliance in this particularly difficult area.

For expert legal advice on this or any area of employment law, please email Paul Maynard (Employment Law Services Partner) or call him on 01323 435 900. To learn about Paul’s skills and experience, please view his website profile.

Learn about the services offered by our employment solicitors.

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