HMRC locate £340k in back pay for care workers

Hundreds of care sector workers stand to receive nearly £340,000 in back pay as a result of investigations by HMRC which found that they were not being paid the National Minimum Wage (NMW).

Over a two-year period, HMRC looked at jobs across the sector and investigated 224 employers. Some inquiries are ongoing, but to date 88 cases have been found to be non-compliant. So far HMRC have identified nearly £340,000 in arrears for over 2,400 workers and also over £110,000 in penalties to employers for breaking the law.

The results of the department's targeted enforcement work suggest several reasons why care sector employers fail to pay NMW including: making illegal deductions such as uniform costs; not paying for time spent training or travelling between care jobs; charges for living accommodation; incorrect hourly pay rates; and incorrect use of apprentice rates.

Whilst it is not a requirement under NMW law to make separate payments to workers for travelling time, working time records must include details of travelling time and all time 'at work'. These records can be used to check that workers are receiving at least the appropriate NMW rate of pay for their age and status, HMRC said.

Richard Summersgill, HMRC director for local compliance, said: 'Concerns had been raised about abuse of the rules in the care sector and so HMRC decided to take a closer look to ensure that care workers were getting a fair deal. We checked that employers were operating the rules correctly and when we found the rules were not being followed, we acted quickly.'

HMRC advised employers to make sure they keep full records of the precise hours employees work, and check situations where deductions from workers' pay can result in them receiving less than NMW rates, as well as being aware of the amount of the accommodation offset and ensuring that this is factored into workers' pay where accommodation is provided.

Jo Swinson, employment relations minister, said: 'Anyone entitled to the NMW should receive it. Paying anything less than this is illegal and unacceptable. Government will take tough action on employers who break the law, as we can see through HMRC's investigation into the care sector. As well as financial penalties, employers who don't play by the rules can be publically named and shamed and may even be prosecuted.'

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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