The Department for Business, Energy & Industrial Strategy (BEIS) has published updated guidance on National minimum wage law enforcement
BEIS is responsible for policy on the national minimum wage (NMW) and national living wage (NLW). HMRC is responsible for enforcing the law.
This guidance has been updated and accompanying guidance published principally to incorporate how HMRC will enforce arrears from care employers who have underpaid care workers who do ‘sleep-in’ shifts.
The main guidance is in Policy on HM Revenue & Customs enforcement, prosecutions and naming employers who break National Minimum Wage law. The guidance covers everything from arrears, notices of underpayment, penalties and powers of enforcement officers, to criminal prosecutions, employer obstruction and naming offenders.
The November update to the guidance includes
Workers doing ‘sleep-in’ shifts
A ‘sleep-in’ shift is a feature of the residential care sector. These are overnight shifts where the worker has to be present on the employer’s premises in case anything goes wrong. However, they are allowed to go to sleep during the shift, only having to wake up if and when they are called upon to carry out duties, such as assisting a resident.
Traditionally, the normal arrangement has been that the worker was paid a fixed amount for the shift and also an additional hourly rate for any time during the shift when they have to wake and carry out a task. However, the Employment Appeal Tribunal has recently held that all of the sleep-in shift time is ‘time work’ for which workers are entitled to NMW/NLW. This means that the care sector will have to pay workers six years’ arrears and NMW/NLW going forward.
The government has launched a new compliance scheme for social care providers that may have incorrectly paid workers below legal minimum wage hourly rates for sleep-in shifts. Such employers will be able to opt into a new social care compliance scheme (SCCS), giving them up to a year to identify what they owe workers, supported by advice from HMRC. Employers who identify arrears at the end of the self-review period will have up to three months to pay workers.
More about NMW and NLW
NMW/NLW is the minimum pay per hour that almost all workers are entitled to. The NMW or NLW that a worker should receive depends on their age and whether they are an apprentice. Workers must be at least school leaving age to get NMW. NLW came into force on 1 April 2016 and applies to workers aged 25 and over. Current rates since April 2017 for NLW and NMW are:
National Minimum Wage
25 and over
21 to 24
18 to 20
From April 2017
Apprentices are entitled to the apprentice rate if they are either aged under 19 or aged 19 or over and in the first year of their apprenticeship.
Government has published guidance for employers on NMW and NLW.
The introduction of NLW increased the number of workers paid at a statutory minimum rate. This, along with an increase in the number of sectors affected by the minimum wage, raised compliance risks. For this reason, the government strengthened the enforcement of the minimum wage. This includes increasing financial penalties for non-compliance from 100% to 200% of the arrears that employers owe, setting up a dedicated team in HMRC focused on tackling the most serious cases of non-compliance, and further increasing HMRC’s enforcement budget.