1st October 2021
Earlier this year the Supreme Court ruled in favour of Mencap over entitlement to the National Minimum Wage (NMW) for sleep-in carers for the hours leading up to carrying out any care duties.
The Tomlinson-Blake v Mencap case, which has been ongoing for several years, considered whether care workers were entitled to NMW for the time not spent performing their care duties but remained at home during their shift while waiting to perform their duties. The Supreme Court confirmed the Court of Appeal ruling (2019) that care workers are not entitled to NMW whilst waiting to be called out to provide patient care.
The Supreme Court concluded that under both the original 1999 and 2015 NMW regulations, the worker was only entitled to be paid for the actual hours worked.
Relief for employers
Whilst the decision was no doubt disappointing for the claimant (and thousands of other care workers), employers can breathe an enormous sigh of relief. The sector was potentially faced with estimated back-pay claims of £400m (much of which they did not have the funds to pay) which would have been devastating for the sector had a different decision been announced. Needless to say the pandemic would have amplified the impact of back-pay requirements.
Will the Government consider any changes to the NMW regulations?
Everyone will acknowledge it is important to protect employees and ensure they are paid a fair wage, and that is the underlying intention of the NMW regulations. However, many employers find the regulations are cumbersome to administer and at odds with the Income Tax and National Insurance rules associated with operating a payroll.
The following are examples of the challenges many employers face in trying to comply with the regulations:
- How to calculate the hourly rate of pay?
- How to monitor the hours worked?
- When is an employee a salaried or unmeasured worker?
- How to correctly calculate the minimum wage for the relevant pay period?
- How to recognise and then treat deductions for the purposes of the regulations?
- What happens if an employee is asked to attend a meeting at the beginning/end of their normal working day?
Whilst the Supreme Court decision in the Mencap case is final, we can see the NMW regulations will continue to present many challenges to the sector. It is important that employers ensure they are correctly applying the NMW regulations. Not only are there financial implications for ‘getting it wrong’ but the reputational risks of being ‘named and shamed’ can be equally damaging too!
For more information about travel subsistence, please contact Nick Bustin, Employment Tax Director.