Government is waiving historic financial penalties against employers concerning sleep-in shift pay in the social care sector
A spectacular u-turn by the UK government has averted the social care sector facing a funding crisis.
Last week HMRC began delivering demands to social care organisations for upto six years worth of back payments regarding sleepover pay for care staff.
It follows an EU ruling last year demanding care staff be paid the minimum wage for overnight stays while caring for clients.
The HMRC responded by say the UK care sector would have to pay around £400m bill in back pay from September, as well as incurring penalties for underpaying staff in the past.
The exceptional measures announced today are intended to minimise disruption to the sector
But after several leading care organisations said the payments could force them to close, the government said it would drop plans to levy penalties and suspend demands for back payments until October.
A spokesperson for HMRC said: “Ministers have worked closely with the sector in response to concerns over the combined impact which financial penalties and arrears of wages could have on the stability and long-term viability of providers.
“The exceptional measures announced today are intended to minimise disruption to the sector by recognising these unique pressures, and ensuring that workers receive wages they are owed.”
Instead of being paid £25-£35 for a sleepover shift, staff must now be paid at least £60.
Social care groups immediately implemented the change in pay, however they were also told they would be liable for back payments, which charity Mencap calculated to be around £400 m.
Penalties for not paying the minimum wage were also set to be imposed, despite former government guidelines suggest reduced sleepover rates were legal. In total, these penalties would have cost the sector around £200m.
Derek Lewis, the chairman of Mencap, welcomed the move but said the government had still not given any commitment over help with the back pay.
He said: “The government say they will consider this further but they have heard for months about the mayhem this will cause.
"The announcement does not address the core request made by the sector at all.”
Around 200 organisations were thought to have been affected by the demand with several saying they would go bust if the HMRC demanded backpay.
The UK government’s Department for Business, Energy and Industrial Strategy said it would now meet social care representatives to iron out a long-term solution.
“Social care providers play a vital role in supporting some of the most vulnerable people in our society and workers in that sector should be paid fairly for the important work they do,” a government spokesperson said.
“The government remains equally committed to making sure workers in this sector receive the minimum wage they are legally entitled to, including historic arrears.”
