Pay victory for care workers denied the minimum wage

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Around 3,400 care workers have received a total of £650,000 in back pay since HMRC began an investigation into the sector, it has been confirmed.

At least 130 care providers have been investigated and fines totalling £122,249 were issued to companies that were paying staff below the minimum wage since April 2015, The Times reported. Companies that break the law can additionally be fined 200 per cent of the amount owed.

The news marks arguably the most significant ever intervention by HMRC into pay issues in an individual sector, which was carried out in response to a series of complaints from unions and individual care workers. HMRC has indicated its next target could be employers that use freelance staff on a long-term basis.

Many of the cases involved care workers who were not paid for the time they took travelling between jobs, or who were underpaid for the hours they spent delivering live-in care. People Management recently reported on 17 care workers, employed on zero-hours contracts, who launched an ongoing legal action against contractor Sevacare. They claimed they were paid just £3.27 an hour, as they were effectively working 24 hours a day. In one case, they lived in the home of an elderly woman with severe dementia for seven days at a time.

An HMRC spokesman said: “All businesses, irrespective of their size or business sector, are responsible for paying the correct minimum wage to their staff. HMRC continues to crack down on employers that ignore the law.

“At the start of the year, HMRC had 130 open investigations into care providers as a result of complaints made by employees and, as a result of our targeted enforcement campaign, ensuring that care workers receive the wages they are entitled to. As part of this, we are taking targeted action against some of the biggest social care providers.”

The minimum wage currently stands at £7.20 per hour for over-25s, but the Resolution Foundation estimates that about 16,000 care jobs are paid below this level, by an average of £815 a year, per worker. To pay for future rises in the national living wage (NLW), the think tank has urged ministers to increase funding to avoid care sector employers being forced to cut jobs or hours. If the NLW rises to £9 per hour in 2020, as was originally forecast, this could cost employers in the sector £2.3bn.

Unison is currently planning test cases to challenge pay and conditions in the sector. Its general secretary, Dave Prentis, said: "With few exceptions, most home care workers get below the minimum wage. That's primarily because they're only paid for caring time, not travel time. That might not amount to much if all the elderly people they look after lived on neighbouring streets, but in congested cities or in rural area up to half a home care worker's working day can be spent on the road travelling between houses.

“No one would expect a paramedic to be paid only when they’re saving patients’ lives or a firefighter just for when they’re putting out fires, and home care workers shouldn’t be treated any differently. Yet sadly they are. HMRC is supposed to make sure firms comply with wage laws, but it's failing to do so.”

The blame lies with government funding, not care home companies, according to Martin Green, chief executive of Care England. He told The Times that providers were paying the price for the inability of local authorities to fund care properly. It was reported yesterday that the government was considering allowing councils to temporarily raise council tax to avoid a funding crisis in the sector.