Yesterday the government announced a new scheme to address pay owed to sleep-in shift workers, but charities and unions have condemned it.
Charities have been urging the government to rethink enforcement action over back-pay for sleep-in shift workers, which could cost the sector £400m, with enforcement action paused until yesterday to allow discussions to take place.
The government has now published its interim enforcement policy including a voluntary Social Care Compliance Scheme (SCCS) which requires organisations to assess their own back-pay liability and repay any wage arrears to workers.
However charities, unions and a lawyer have criticised the new scheme.
Repay workers by March 2019
Under the new scheme providers will normally be given twelve months in which to conduct the self-review with access to HMRC technical support, and then up to three months to pay all arrears. But the deadline for repaying arrears to workers will not be later than 31 March 2019.
Organisations that join the voluntary scheme will remain anonymous and not be required to pay an additional financial penalty for underpayment. HMRC will contact organisations where an employee has complained to encourage them to join the scheme.
Suppliers who do not join the scheme will be subject to a full HMRC investigation, public naming and shaming, and additional financial penalties.
However, the guidance says a bespoke financial assessment may be undertaken for some providers who are already being investigated by HMRC, potentially allowing more time for them to back-pay staff “to avoid threatening the loss of existing care workers’ employment”.
It says: “The government is exploring options to minimise any impact on the sector. The government has opened discussions with the European Commission to determine whether any support, if deemed necessary, would be subject to EU state aid rules.”
'Potentially disastrous consequences'
But charities have criticised the scheme and said there could be "disastrous consequences".
Derek Lewis, chair of Mencap, said the government’s announcement “completely fails to give any reassurance to people with a learning disability that their homes and care are secure and to carers that their jobs are not under threat”.
“Three months on from the government’s commitment to seek a solution to the devastating £400m liability hanging over the sector, there is only the promise of further delay and no commitment, even in principle, to accept responsibility for a liability created by government changing the rules.”
Lewis said smaller providers would be reluctant to sign up to the government’s new scheme as they will be “concerned that they will be writing their own suicide note”.
“Meanwhile, although government has belatedly issued guidance to local authority care commissioners that they should in future be funding the increased cost of sleep-ins, over half of local authorities are still refusing to do so. It is quite wrong that providers should be expected to subsidise the increased cost of on-going sleep-in care.”
Tim Cooper, chief executive of United Response, said: “I’m saddened by the government’s decision today. On behalf of the thousands of vulnerable people we care for, I expected better.
“This is a fudge with potentially disastrous consequences for some of the most vulnerable people in our society.
“We recognise that the government has taken some measures to relieve the immediate pressure on employers by waiving penalties and allowing up to a year to assess the liability, however it has continued to shirk the fundamental question of how employers are to afford the significant costs – estimated at £400m.
“The vital services which we provide are wholly publically funded. It cannot be right for the government to ask us to use our charitable reserves to foot a substantial bill which results from a government mistake – albeit honestly made.
“We call on the government to ensure that low paid social care workers are speedily paid what they are owed and that government ensures that employers are fairly funded to do this. This is the right and proper thing to do and the government must make an unequivocal commitment now, not in 12 months’ time.”
The Voluntary Organisations Disability Group chair Steve Scown said: “Despite funding independent research, providing detailed analysis and information for the Department of Health as well as offering pragmatic solutions we find government has done well to talk to itself, but not the sector.”
“The announcement raises lots of uncertainties and unanswered questions which we shall be taking to government. This situation risks yet more unintended consequences as the limbo for providers and personal budget holders continues.”
Workers’ union Unison was critical about the government’s latest announcement.
Unison assistant general secretary Christina McAnea said: “This scheme helps no-one. The care system is creaking at the seams, and no-one wants to see it plunged further into crisis.
“But without sufficient numbers of care workers and a substantial injection of cash from the government that's exactly what will happen. Then elderly people and vulnerable adults will be left with no-one to look after them.
"Care workers who have been paid illegally low wages over many years shouldn't have to go months and months before getting back what they're rightfully owed. Ministers knew for years that sleep-in workers were not being paid properly. If they'd stepped in sooner, this mess could have been avoided.
"Unfortunately the voluntary nature of this scheme means unscrupulous employers will now be able to slip through the net and their staff won't get a penny back."
Lawyer urges charities not to sign up
Meanwhile, Matt Wort, partner at Anthony Collins Solicitors, urged charities not to sign-up to the government scheme.
He said: "The lack of clarity in the new guidance is appalling – policymakers are urging care providers to self-assess their National Minimum Wage liability with no indication of how far back these payments may stretch.
“Businesses and individuals must not sign up to this self-assessment scheme until they have further clarity."
Wort added that Mencap’s upcoming court of appeal case, due to be heard in March 2018, could change the position as to whether sleep-in carers are entitled to the minimum wage.