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The UK government has today announced that it is waiving historic financial penalties against social care providers who are found to of underpaid employees in respect to “sleep-in” shift pay.

The announcement is in response to concerns expressed by the sector that enforcement activity may destabilise an already struggling social care sector.

Government Ministers have reportedly worked closely with the social care sector, responding to concerns that financial penalties and arrears of wages could have a detrimental effect on the long-term viability of providers, and in-turn prove to be harmful for social care users themselves.

The government say they accept that the cumulative impact of penalties and the arrears of wages could pose significant challenges to the social care sector. Due to existing pressures, providers may be unable to repay their workers what they are owed.

Today’s announcement means HMRC will waive historic financial penalties owed by employers who have underpaid their workers for overnight sleep-in shifts before 26 July 2017.

HMRC will also temporarily suspend enforcement activity related to the payment for “sleep-in” shifts by social care providers until 2 October 2017.

The waiver (see paragraphs 6 and 7) will apply to any arrears of pay resulting from “sleep-in” shifts that took place before today.

The government says it will continue to work with the social care sector during the suspension of enforcement activity, to see how it might be possible to minimise any impact on the provision of social care.

However, the government insists it remains committed to ensuring workers in the sector are fairly remunerated for the vital work they do, stressing that providers are still expected to pay their workers “according to the law”.

Any employer underpaying their staff for “sleep-in” shifts in the future will remain liable to pay financial penalties of up to 200% of the arrears discovered by HMRC.

Barbara Keeley MP, Labour’s Shadow Social Care Minister, said: “This announcement does little to help sort out the issue of pay for sleep-in shifts.

“Care providers still face a £400 million bill and care workers still have no idea when they will get the money they have rightfully earned.

“Delaying enforcement action for a few weeks does nothing to address the issue and is a dangerous and retrograde step that risks undermining the very principle of a statutory minimum wage.

“If an exemption is granted in this case, it will not be long before other employers start pleading poverty to get out of their duty to properly pay their workforce.

“This Tory Government needs to stop burying its head in the sand about the problems in social care and put the funding of social care on a long-term sustainable footing.”

UNISON general secretary Dave Prentis said: “This announcement is a huge blow for low-paid workers. Each year, care workers are collectively cheated of £130m in wages, but this outrageous state of affairs has failed to prompt any meaningful reaction from the government.

“Now ministers see fit to cave in for employers, many of whom have been ruthlessly exploiting care workers for years.

“There is nothing in the government’s plans that sets out how ministers will ensure care staff get the money they are owed.

“It sends out a message to care workers that they are of little value.”