A third of home care providers pay less than national minimum wage

A third of home care providers investigated by HMRC have paid one or more of their workers less than the national minimum wage, according to a new report.

HMRC’s report ‘National Minimum Wage compliance in the social care sector’ found that in 183 investigations, 48 per cent of care providers had paid one or more of their workers below the national minimum wage.

Fifty-two per cent of care home providers investigated were non-compliant with the figure dropping to 33 per cent for home care providers.

However United Kingdom Homecare Association (UKHCA) warns that these figures should not be seen as a national picture of non-compliance throughout the social care sector.

The selection of employers was determined by home care and care home workers reporting concerns about underpayment of national minimum wage to Government’s Pay and Work Rights Helpline, third-party intelligence indicating potential non-compliance and a selection of employers by HMRC on the basis of perceived risk.

As of 1 October 2013, the national minimum wage for people aged 21 years and above is £6.31 per hour.

The report summarises the findings of 224 investigations into compliance with the national minimum wage opened between 1 April 2011 and 31 March 2013, of which 183 were concluded and a further 41 were ongoing.

The UKHCA blames the non-compliance with the national minimum wage on the low prices being paid by councils for care.

UKHCA chair, Mike Padgham, said: “We believe that non-compliance with National Minimum Wage 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.”

A number of home care providers have recently pledged their commitment to paying workers above the minimum wage and for travel time. One of these is Penrose Care, which pays its workers the London Living Wage which was increased by London Mayor Boris Johnson earlier this month to £8.80 an hour. It also pays for travel time.

Similarly Radfield Home Care, which also pays its staff above the minimum wage and for travel time, has just launched its new ‘Caring for Carers’ Pledge to promote good practice across the sector.

UKHCA has alerted Government, HMRC and the Low Pay Commission to the lack of reliable guidance to help employers interpret the national minimum wage regulations, given the complex working patterns required to deliver social care services, including travel between home care visits.

UKHCA is concerned that a number of employers may have unwittingly breached national minimum wage as a result.

The payment of home care workers’ travel time has been identified as a significant risk factor to full compliance with national minimum wage.

It is a virtually universal practice for local authorities to pay for home care services by the time spent in the person’s home.

As a result, it has become common practice for home care 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 national minimum wage.

The Resolution Foundation published a report back in August showing that some home care workers are paid as little as £5 an hour because they are not being paid for travelling time.

It highlighted the case of a home care worker called Sharon, from County Durham, who has a working day that begins at 6am and finishes well after 7pm.

She is not paid either for the time travelling between appointments, which can be up to 20 minutes, or for the petrol she uses for work. With overrunning appointments, such as when she arrives at a client’s home to find they are still fast asleep, she works for more than 10 hours but is paid for just eight: “I finish up and head home exhausted having, as always, run a good few hours over what is down on my paper schedule,” she said. Sharon is officially paid £6.50 an hour but the report shows her actual hourly wage is £5.14 an hour, or as low as £4.15 an hour once the cost of petrol is deducted.

UKHCA has published a National Minimum Wage Toolkit to assist employers interpret the national minimum wage regulations. The toolkit is available to UKHCA’s member organisations from www.ukhca.co.uk/downloads.aspx?ID=422.

It is also calling on the Department of Health to use its forthcoming statutory guidance to local authorities to instruct councils to take the full costs of home care services into account when setting fees with voluntary and independent sector providers.

Councils should cease tendering practices which force providers to bid below market rates, including ending the practice of setting maximum prices in tenders, said the UKHCA

It is also advising home care providers to review their basic pay rates, to ensure that workers’ pay, before enhancements, achieves compliance with national minimum wage, including travel time.

UKHCA estimates that 98 per cent of councils in England paid home care providers solely by reference to the time spent in the person’s home (92 per cent in Scotland, 100 per cent in Wales and Northern Ireland).