The learning disability charity Mencap has said it could face a financial crisis if it is forced to pay the minimum wage to 5,000 staff while they sleep at the homes of people they support in case they are needed during the night.
The charity lost an appeal against a ruling that it was wrong to have paid a support worker £29.05 for a nine-hour sleep-in shift, or just under £3.23 an hour. The statutory minimum is £7.50 an hour.
Mencap said it was not against paying its care workers “properly”, and was seeking to raise their rates in the longer term, but that it was not paid enough by the councils and NHS bodies that commission it to support disabled people.
John Cowman, the charity’s director of services, wrote in a blogpost: “This judgment could leave the organisation in financial crisis, at worst leading to insolvency and at best we may have to consider moving out of providing services altogether, which would create huge job uncertainty for our colleagues.
“Unless we get clarity on what the law is telling us to do, and providers get the proper funding, the sector and everyone who relies on it is at serious risk. We are sleepwalking into a complete collapse of social care for some of the people who need it most.”
The judgment against Mencap is the latest twist in a wider battle over payment of sleep-in workers in the care sector. Standard practice has been to pay a flat sum for a shift, plus the minimum hourly rate for time when the worker is roused to help the person they support.
Since last year, however, HMRC wage inspectors have been interpreting the rules to mean that workers are entitled to the minimum rate – the “national living wage” – even when they are asleep if their contract requires them to remain on the premises.
The costs of meeting those costs are estimated by care providers in England to be £800m over three years, which would soak up 40% of the emergency £2bn extra for social care over that period that was announced by ministers in March.
Additionally, HMRC inspectors are instructing employers to calculate backpay for up to six years. Some care providers say this would bankrupt them and it is spreading alarm among 65,000 disabled people who pay their own support workers, using personal budgets allocated by councils.
Tim Cooper, the chief executive of the United Response charity and co-chair of Learning Disability Voices, an umbrella group of support providers, said the issue posed “the single biggest threat” to transforming care and support for learning disabled people to enable them to live independently in the community.
“The government must stop HMRC’s enforcement activity with immediate effect or else face depriving the most vulnerable in society of the care that they desperately rely on,” Cooper said.
The Mencap case was one of three similar appeals heard together and involved a “highly qualified and extensively trained” support worker in east Yorkshire who had worked for the charity since 2004. She was backed by the Unison trade union.
Although the hearing was told that the woman had been roused only six times in 16 months to help a resident of the house where she did sleep-ins, it was held that she was entitled to the full hourly rate because she had to “keep a listening ear” and was not allowed to leave the house.
Mencap, which is to further appeal against the ruling, says it faces a bill of £10.5m if it has to pay all support workers the minimum wage for sleep-in shifts and give them two years’ backpay. The charity last year reported total income of £190m.
Ministers from several government departments are understood to have begun meeting shortly before the general election was called to discuss sleep-in pay, which the care minister David Mowat has described as an unexpected consequence of minimum pay rules and “a £200m-ish headache” for the care sector.
A spokesman for HMRC told the Guardian last month: “The case law is very fact-specific and each case HMRC investigates is assessed on its own merits and the facts established. If HMRC considers the facts of the working arrangements to mean that the worker is working whilst asleep, they will be entitled to [minimum wage] for that time and HMRC will make an assessment as to whether arrears are owed to the worker.
“HMRC has no discretion to reduce the value of the arrears owed to the worker, or to disapply the uplift.”
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