Source: Peninsula UK
Employers in the Care sector are eagerly awaiting the decision of the Supreme Court in a case which could have a significant effect on wage bills.
The claim centres around the payment of the National Minimum Wage for sleep in shifts. The worker, Ms Tomlinson-Blake, claimed her employer, Mencap, was failing to comply with the law on minimum payments because it did not pay her NMW for the time she spent asleep during a sleep in shift.
Previous court decisions on this case have contradicted each other. The Supreme Court will make a final decision on whether sleeping hours attract NMW in the coming weeks.
So what could this decision mean for employers?
How does the NMW work?
The law says that workers must be paid NMW for every hour they spend ‘working’. The employer must count up the number of hours of ‘work’ in the pay period and then divide the worker’s pay by that number. The result must come out at the National Minimum Wage rate for the worker’s age or above. The current rate for workers aged 25 and over is £8.21 per hour, increasing to £8.72 from 1st April 2020.
What’s the main argument in the case?
The claim hangs on whether workers performing a sleep in shift are considered to be ‘working’ whilst asleep. If they are, then the number of working hours in the pay period will be higher than if they didn’t count. This will have an effect on the calculation mentioned above.
What’s the current situation?
The Court of Appeals said that workers are ‘available for work’ and not actually ‘working’ when asleep which means that employers do not count sleeping hours towards working hours when doing the NMW calculation each pay period. The Supreme Court has a choice to make; it either agrees with the Court of Appeal or it disagrees and finds that workers who are asleep on a sleep in shift are in fact ‘working’.
What is the impact of the Supreme Court decision?
If the Supreme Court agrees with the Court of Appeals, employers who do not currently count sleeping hours as working hours may continue to do so and will be complying with the law. If however, the decision is that sleeping hours do count as working hours, it means workers will be entitled to NMW for all the hours of a
sleep in shifts.
What does it mean for me if sleeping hours count as working hours?
Employers will have to review their pay practices and ensure that all hours of a sleep in, and not just those spent awake for the purposes of working, are factored into the NMW calculation. The impact will be variable; the retainer that is commonly paid for a sleep in shift may well cover the NMW for workers who are rarely woken to provide care. However, the situation will be different for those who are woken regularly for long periods. Wage costs could be driven up and employers may be at risk of employment tribunal claims or HMRC fines.
What should I do now?
The practical advice is to wait for the Supreme Court decision, but prepare for the fact that workers’ wages may have to be reviewed. Employers are advised not to make rash decisions which may be difficult to reverse.
For more information, contact us at HCPA and we will introduce you to our colleagues at Peninsula UK.