HMRC looks at low payers

Posted on December 31st, by geoff in Caring Times head, CT Extra. No Comments

Caring Times, January 2014

A report from HM Revenue and Customs (HMRC) into social care employers’ compliance with NMW Regulations (note 3) found that in 183 concluded investigations, 48% of employers had paid one or more of their workers below the National Minimum Wage. Among employers targeted by HMRC, non-compliance with the NMW was 52% among residential care service providers and 33% among homecare providers.

The United Kingdom Homecare Association says the combination of the downward pressure on prices exerted by local councils and a general reduction in the lengths of visits purchased in recent years has affected many homecare providers’ ability to set pay rates which have kept abreast with annual increases in NMW, a link repeatedly highlighted by the Low Pay Commission. UKHCA Chair, Mike Padgham, said: “We believe that non-compliance with NMW is a symptom of the wider picture of under-funded social care, and not the deliberate action of individual employers.

“While it is essential that employers comply with the law, it is a disgrace that social care is so poorly funded that employers struggle to keep ahead of the Minimum Wage. This is a sad reflection of the low value society places on the social care workforce and the outcomes our vital workforce secure for older and disabled people.”

UKHCA has alerted Government, HMRC and the Low Pay Commission to the lack of reliable guidance to help employers interpret the NMW Regulations, given the complex working patterns required to deliver social care services, including travel between homecare visits (notes 6 and 7). UKHCA is concerned that a number of employers may have unwittingly breached NMW as a result. HMRC’s report provides the first step towards identifying particular risk factors in the sector. The payment of careworkers’ travel time has been identified as a significant risk factor to full compliance with NMW. It is a virtually universal practice for local authorities to pay for homecare services solely by reference to the time spent in the service users’ home (note 8). As a result, it has become common practice for homecare providers to pay their workforce in a similar way, at an hourly rate sufficient to recognise the additional travel required which counts as “working time” for the purposes of NMW (note 9). In addition, compliance with NMW specifically excludes the enhanced rates of pay necessary to incentivise out-of-hours and weekend working and the very short homecare visits that local authorities now commission as a result of public spending constraints.

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