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09th December 2013

Back pay of £340,000 to Care Workers ordered by HMRC

iStock_000016685423SmallInvestigations by HMRC have revealed that some 2,400 care workers have been underpaid in relation to the National Minimum Wage (NMW) and subsequent fines on employers have totalled over £110,000. The Employment Relations Minister, Jo Swinson has also threatened that in future employers could be  “named and shamed” or even prosecuted.

It is important to watch for mistakes that could catch you out:

  • making illegal deductions such as for uniform costs; deductions or uniform costs are not necessarily illegal, but there are rules to be followed so the NMW rates are not compromised or you ordered to repay the costs concerned
  • not paying for time spent training; not all time spent training needs to be paid but, as a general rule, if the training is required by you as the employer, then it does need to be paid time
  • travelling between care jobs; this has been challenged in court recently in the case of Whittlestone –v- BJP Home Support Ltd. There the Employment Appeal Tribunal made it clear that such time needs to be paid time
  • charges for living accommodation; there is an accommodation offset rate and this can count towards the NMW but it is limited.
  •  incorrect use of apprentice rates; there are now three rates for under 21’s including an apprentice rate for those who are under 19 or who are in the first year of their apprenticeship

To protect yourself make sure you check out what your employees are earning by, where appropriate, taking into account the factors above. If these bring employees’ wages below the NMW rates (even if the hourly rates are above it) then corrections are needed. Careful comprehensive records are also required to protect you if HMRC comes knocking at the door.

It should be noted that time spent training and travelling between jobs will similarly be liable to Working Time Regulations.

Malcolm Martin – QCS Expert Human Resources Contributor

*All information is correct at the time of publishing. Use of this material is subject to your acceptance of our terms and conditions.

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