27th July 2017

Government Announces Temporary Suspension of HMRC Enforcement Activity

Following the announcement by HM Government yesterday that;

  • It has temporarily suspended HMRC enforcement activity over payment of sleep-ins by social care providers until 2 October 2017 and
  • It will waive historic financial penalties owed by employers who have underpaid their workers for sleep-ins before 26 July 2017

Oliver McCann, Employment Partner, Head of East Lancashire Office, Napthens LLP and QCS Employment Law Contributor commented on the announcement.
“The Government yesterday announced that it was temporarily suspending enforcement activity against employers in relation to sleep-in shift pay until 2nd October 2017 and waiving historic financial penalties. A copy of the Government statement can be found here.

This is clearly welcome relief for employers in the social care sector regarding historic breaches to date regarding sleep-ins and a failure to pay the National Minimum Wage (“NMW”), particularly in light of the complexity of this issue. The government’s move in this regard perhaps reflects the government's acknowledgement of the extreme economic challenges within the sector in terms of reduced funding and increased demand for services etc. and the importance the sector plays in our society.

However, the announcement from the government is limited to HMRC enforcement of NMW breaches in relation to sleep-ins. It will have no effect on:

Enforcement activity for normal NMW breaches including “work” between client visits; and

  1. Any actual claims brought by employees against employers for failure to pay National Minimum Wage.

The recent “Mencap case” made it clear that a flat rate fee for sleep-ins which fell below the National Minimum Wage was unlawful. This is still good law and the Government has made it clear in its statement that it is still committed to making sure care workers receive the National Minimum Wage so we are not expecting the Government to legislate to prevent these claims going forward. Employers should be aware of this and look to take appropriate action to protect their positions.

We will continue to keep you updated about the latest position in this complex and ever-changing area.

*All information is correct at the time of publishing

Oliver McCann

Napthens LLP – Employment Law Specialist

A highly experienced employment lawyer, Partner Oliver McCann acts for employers across all industry sectors, from owner-managed business through to large PLCs, as well as education establishments and charities. He has particular experience in advising employers in domiciliary care, leisure, retail, security, manufacturing, marketing, and the IT sectors. Read more

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