The government has updated its guidance following a landmark court ruling, and now says that “sleep-in shift” workers are not necessarily entitled to the National Minimum Wage.
But charities have criticised the ruling and say they are "left in limbo" because it does not give clarity and could be changed in the future.
Until recently, common practice was that sleep-in shift workers were paid a flat-rate for the overnight shift and only paid the minimum wage for the time they were awake and providing support.
But in 2016 the Department for Business, Energy and Industrial Strategy (BEIS) published new guidance, following a court ruling, saying that sleep-in shift workers, employed by many social care charities, should be paid the full minimum wage.
HM Revenue & Customs sought to enforce this retrospectively, and charities had faced a demand for back pay of an estimated up to £400m.
But a Court of Appeal hearing in March, involving Mencap, ruled that sleep-in shift workers were not entitled to the full minimum wage. BEIS has now updated its guidance once again to reflect the latest judgment.
The case is still not settled. Workers union Unison has lodged an application to appeal the latest Mencap ruling in the Supreme Court. BEIS’s document suggests that the guidance may change yet again if Unison’s appeal is heard and a new judgement is issued.
What does the new guidance say?
The current guidance now says: “If the employer provides suitable facilities for sleeping, minimum wage must be paid for time when the worker is required to be awake for the purpose of working, but not for time the worker is permitted to sleep.
“However, if suitable sleeping facilities are not provided then minimum wage must be paid for the entire shift.”
“The position is different where workers are working and not expected to sleep for all or most of a shift, even if there are occasions when they are permitted to sleep (such as when not busy).
“In this case it is likely minimum wage must be paid for the whole of the shift on the basis that the worker is in effect working all of that time, including for the time spent asleep.”
‘Left in limbo’
The Voluntary Organisations Disability Group (VODG) expressed disappointment that the guidance did not provide more clarity on what sleep-in shift workers should be paid.
Steve Scown, VODG chair said: “Government has the opportunity to use a statutory instrument to legislate once and for so all parties are clear on what the rate of pay should be for sleep-in shifts. As things stand this type of work is totally unregulated.
“That leaves staff, commissioners and employers in limbo. We are already seeing hard pressed local authorities introducing cuts to previously agreed rates of pay for sleep-ins. It is inevitable that without government action we will see a postcode lottery of pay rates for overnight support.”
Tim Cooper, co-chair of Learning Disability Voices and chief executive at United Response, similarly expressed disappointment at the guidance, saying it should have guaranteed that sleep-in shift workers are due the full minimum wage.
He said: “We call on the government to act swiftly and decisively to remove the confusion by setting out in law that National Living Wage (NLW) applies to sleep-in shifts and to remove the fear by ensuring that local authorities and providers are properly funded for all shifts, including sleep-ins, at the NLW.
“There is a moral obligation for the government to ensure a fair deal for employees and employers alike. It is now over to the government who need to provide stability for the sector after the last three years of uncertainty.”