Half of all home care providers investigated by the HMRC cheated their workers out of the National Minimum Wage, damning new research reveals.
A freedom of information request (FOI) from the Shadow Minister for Care and Older People, Kate Green MP, found that of the 201 Minimum Wage compliance enquires completed by the HMRC, 101 employers were found to be non-compliant. 23 enquires are still to be completed.
The investigation was made in response to research from Unison, which shows that most councils in England and Wales are failing to ensure that home care providers adhere to national minimum wage legislation. 79% of councils admit they have never asked to see pay records, or other written evidence, about the pay of care workers employed by care providers they commission, say Unison.
Unison’s research found that “more than 200,000 care workers receive less than £6.50 an hour” and some reported “hourly rates as low as £3.50”. Some councils made excuses for not checking for compliance, which included relying on the Care Quality Commission and Department for Work and Pensions to carry out checks.
The HMRC said non-compliant social care providers owe their workers more than £1 million in unpaid wages.
Failure to adhere to national minimum wage regulations can result in a criminal fine equivalent to 100% of the arrears owed. The maximum possible fine increased from £5,000 to £20,000 after 7 March 2014. Labour has called for this to to be more than doubled to £50,000.
The FOI also reveals how 100 penalties have been issued against non-compliant social care providers, with a total value of £125,845. One penalty was cancelled because the worker could not be traced.
Liz Kendall MP, Labour’s Shadow Minister for Care and Older People, said:
“Care workers do an incredibly important job, looking after our loved ones when they are at their most vulnerable. Yet as Unison has shown, thousands are not even paid the minimum wage, let alone a living wage.
“Labour’s research has revealed that half of all providers inspected by HMRC failed to pay the minimum wage. Over a million pounds was owed to care workers – yet still, neither HMRC nor the Government will tell us which companies are responsible or how many people have been affected.
“It is totally unacceptable for companies to fail to meet their legal duties. The Government must immediately name the companies concerned, HMRC must take action in each case where it finds non-compliance, Ministers must accept Labour’s call for fines for non-payment of the minimum wage to be raised to £50,000 and dedicated care workers must get what they are owed.”
Unison say they have written to all councils in the UK, asking them to sign up to the union’s Ethical Care Charter. According to the union, it commits councils to buying homecare only from providers who give workers enough time, training and a living wage. So far, eight councils have signed up, with a further eight expected to add their names shortly.
Unison General Secretary Dave Prentis said:
“The Government’s feeble guidance to councils will do little to curb the endemic practice of illegally paying care workers less than the National Minimum Wage. It is a scandal that more than 200,000 care workers receive less than £6.50 an hour. Many members are reporting actual hourly rates as low as £3.50.
“The only way to stamp out these illegal practices is for the Government to tighten its guidelines to ensure there is a contractual condition between councils and homecare providers that workers must be paid at least the minimum wage. And councils must be required to properly monitor compliance.”
He added: “The knock on effect of paying illegal wages to homecare workers is that it hits the people who rely on these services every day. Ensuring decent pay for care workers is all about improving the quality of life for the people they care for.
“A decent wage and more secure employment makes it possible for dedicated care workers to stay in the job and focus on giving the best possible care.”
The HMRC refused to disclose the names of the employers who cheated their workers out of the national minimum wage, claiming the information is protected under the ‘Commissioners for Revenue and Customs Act 2005’.