Introduction
Possibly one of the most uncertain areas within the social care sector over the last few years has been whether or not the national minimum wage is payable during “sleep-ins”. The legal position and case law can be difficult to apply depending on the circumstances. Our latest blog on this point was in June this year – https://www.qcs.co.uk/national-minimum-wage-payable-employees-carrying-sleep-ins/
Subsequently, the government announced a temporary suspension over enforcement action given the uncertainty and complexity around this and the financial pressures already on social care service providers. More details can be found here – https://www.qcs.co.uk/government-announces-temporary-suspension-hmrc-enforcement-activity/
The government has now launched a new compliance scheme for social care providers who may have incorrectly paid workers below legal minimum wage whilst performing sleep-in shifts.
What is the SCCS?
Employers in the social care sectors will now be able to opt into the newly formed Social Care Compliance Scheme (SCCS) which will allow them a grace period of one year to identify whether they owe any back pay to their workers and exactly how much they owe.
HMRC has confirmed that there is no obligation for employers to join the scheme but has urged employers to do so. HMRC has also confirmed that, where they have an outstanding complaint in regards to an employer, that they will be contacting those employers directly to encourage them to join the scheme.
Once an employer joins the SCCS and they identify any arrears that are owed to their workers, the employer must repay the monies owed within 3 months. The SCCS has also implemented a final deadline of the 31st March 2019, in which all employers must settle any outstanding back pay. The deadline for employers to sign up to this scheme is the 31st December 2018.
Financial Penalties
HMRC has confirmed that any employer who does not sign up to the SCCS will remain subject to HMRC’s normal enforcement procedure and will, if found to have not been paying the national minimum wage, be liable for a financial penalty. Financial penalties are currently set at 200% of the amount owed to workers and up to a maximum of £20,000 per worker. Employers could also face being named publicly for underpayment of the National Minimum Wage. A point to note, however, is that financial penalties will only relate to sleeping time arrears incurred after the 26th July 2017.
Employers wishing to join the SCCS can do so by following the link below:
https://www.tax.service.gov.uk/apply-for-social-care-compliance-scheme/capacity-registering
The Government has recently suggested that it would assist in repaying monies owed to workers but the recent announcement of the scheme does not specify any measures of how this will be achieved. The announcement, however, does state that the Government is exploring options to minimise the impact on the care sector, so it is likely that further information will be released in due course following their consultations with the European Commission.
It is our recommendation that, if you believe your business may not have applied the national minimum wage correctly to sleep-ins, you take legal advice and sign up to the scheme.
