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Sleep-ins and the National Minimum Wage
HMRC has recently decided to enforce payment of the National Minimum Wage to those workers who are required to sleep-in as part of their role. Clayton & Brewill explains more about sleep-ins and the National Minimum wage and what the recent changes mean for those businesses likely to be impacted.
Sleep-ins – the basic position
A ‘sleep-in employee’ is basically, a worker who is required to be on the premises and who would be disciplined if they left the workplace.
The employee will be deemed to be working for the whole of their overnight shift even if they are sleeping during some, or all, of this time. This means that they are entitled to be paid the National Minimum Wage (which can be the National Living Wage) for every hour that they are working.
Following a raft of tribunals and union campaigns, HMRC has recently decided that they will enforce the payment of the National Minimum Wage for those who are required to sleep-in as part of their job.
What are the implications of not paying sleep-ins the National Minimum Wage?
Not paying the National Minimum Wage to your sleep-in workers could result in severe penalties for your organisation, including awards of up to six years’ back pay and HMRC enforcement action.
Many care providers are now having to dig deep to try and finance payment of substantial arrears as a result of HMRC’s change in tack.
What should I do if I haven’t paid my sleep-ins the National Minimum Wage?
The government has recently launched a scheme called the Social Care Compliance Scheme, which is for those employers in the social care sector who think they may have paid their workers less than the National Minimum Wage for sleep-ins
The scheme allows organisations to conduct a review and pay any arrears owed to employees, ensuring they avoid any penalties.
Those who haven’t paid the National Minimum Wage to their sleep-ins may be subject to financial penalties, naming and shaming and possible prosecution.
Once you have resolved any back-pay issues, it is also vital to review your contracts and payroll to ensure that procedures are put in place so that sleep-ins are paid the National Minimum Wage from this point onwards.
What about other sectors?
Earlier this year, there was controversy over a number of large employers, including John Lewis, breaching the National Minimum Wage regulations. The main reason for these breaches were due to them averaging the pay of their shift-workers, meaning that they weren’t always paying the National Minimum Wage.
The John Lewis case highlights the importance of those who have employees who work shifts or term-time only, ensuring they are consistently paying the National Minimum Wage.
Read more on the John Lewis case here.