Sleep-in Guidance Update...Please Sir Can I Have Some More?

Last week, the Department for Business, Energy & Industrial Strategy (BEIS) published further guidance on the issue of sleep-ins, in their latest edition of 'National Minimum Wage and National Living Wage, Calculating the Minimum Wage'.

This document, which covers the whole economy as opposed to the care sector or sleep-ins in isolation, is regularly updated by BEIS in an effort to guide workers and employers in calculating minimum wage entitlement. Indeed, it dedicates not even a whole page to sleep-in shifts despite the fact that this area of minimum wage compliance has attracted more column inches in recent years than the other areas covered, combined.

This guidance comes nearly four months after the Court of Appeal judgment which ruled, entirely contrary to the seminal judgments that had gone before it, that sleep-in workers were not entitled to be paid for every hour of a sleep-in shift whether awake or not, instead arguing that such workers were only entitled to be paid during such shifts when they were 'awake for the purposes of working'. Further guidance followed this judgment, including HMRC's previous 'Employer Guide', which I previously commented on back in September 2018 (https://www.linkedin.com/pulse/hmrcs-social-care-compliance-scheme-employer-guide-september-clarke/). This latest guidance seeks to build on previous guidance once more.

The latest guidance confirms that:-

  • Where an employer provides sleeping facilities, workers are required to stay at or near their workplace and they are expected to sleep for all or most of the sleep-in shift, minimum wage need only be paid for time when they are required to 'be awake for the purposes of working'. There is no requirement for them to be paid for time spent asleep.
  • If, in the above scenario, sleeping facilities are not provided, the worker must be paid minimum wage for the whole shift.
  • Where a working is not expected to sleep for all or most of their shift, even if there are occasions when they are permitted to sleep (e.g. when not busy) it is 'likely' minimum wage must be paid for the whole shift, including the time when the worker is asleep. Examples in practice could included where a support worker is regularly disturbed throughout the night during a sleep-in shift.
  • Each case will be different 'depending on all of its individual circumstances', including what the worker's contract says and what is happening in practice.
  • Employers must continue to comply with the law 'as it currently stands', despite the fact that Unison has applied for permission to appeal the Court of Appeal judgment, meaning, if granted, the Supreme Court's judgment could result in the circumstances in which minimum wage is due for sleep-ins altering once more. Any judgment is unlikely to be issued before 2019 and possibly not until 2020.

Although any attempts by Government to clarify the position on sleep-ins is to be welcomed, this latest guidance still does not provide the clarity required by providers, service users or their families and has come under severe criticism from a number of stakeholders, not least the Voluntary Organisations Disability Group (VODG), who have been vocal in alleging the guidance does not help, nor does it go far enough, whilst also blaming the Government for 'sitting on its hands and doing nothing' until the Supreme Court rules on the matter, effectively extending the uncertainty for as long as possible.

I personally agree with Chair of VODG, Steve Scown, when he says that the Government has missed a trick in not legislating on sleep-ins once and for all so that all parties are clear on what the rate of pay should be. Existing guidance still leaves it to the provider to determine whether it is 'reasonable' for a sleep-in worker who is regularly disturbed throughout the night to be paid for the whole shift. Furthermore, current guidance gives the example of a worker who is disturbed for c.35% of his shift as being considered working 'for most of their shift', therefore considered as 'actually working' and, by extension, entitled to payment for the whole of his shift, including those periods where he can sleep...Is the c.35% figure a trigger for payment of the whole shift which providers must adhere to?

Perhaps most worryingly of all, is the growing trend of local authorities introducing cuts to pay for sleep-in shifts, with the VODG itself highlighting an example of one local authority reducing pay for sleep in work to around £4 per hour (once tax and national insurance contributions had been accounted for). Such practices will inevitably lead to a domino effect, as well as a postcode lottery of pay rates for overnight support.

Further effects will also be felt in reducing staff retention in the sector, worsening an already chronic problem and adding to provider's recruitment bills. Indeed, it is the knock on effects from the Government's lack of action on sleep-ins that could have serious and wide ranging ramifications for the sector as a whole. For instance, the recent increase in the national living wage from £7.83 to £8.21 from April 2019 is likely to be severely diluted given the increasing cost of care and the local authority rates already failing to fully cover these costs likely to manifest in continued and significant threat to the ongoing stability of the social care market.

The VODG, as part of their response to the latest guidance, is calling on the Government to confirm that the current legal position means that providers will not face potential HMRC retrospective action to recover underpayment of minimum wage for sleep-ins, either now or in the future.

Much like Oliver Twist, the current provisions are simply not enough and care providers need further clarity sooner rather than later so as avoid further market turmoil.

Lloyd Clarke is a health and social care expert and regularly advises clients on legal issues facing the sector. If you are a provider who requires legal advice or assistance with the issue of sleep-ins or any other issues affecting your business generally, please do not hesitate to contact him on 01473 229240 or lloyd.clarke@attwells.com.