Despite the many vagaries of the UK tax system there are very few issues that cause me as much angst as 2 particular matters. Considering if a van is a van (although this article will not cover that subject) and HMRC’s view on a sleep-in shift. This article concentrates on a sleep-in shift.
What is a sleep-in shift and what sectors of the UK economy are specifically affected? A sleep-in shift is where an employee is either required to sleep-in at a care home or similar establishment or they are employed to care for an individual on a one to one basis in that individual’s own home.
Joe public may think that if you are asleep you cannot be working and therefore subject to National Minimum Wage considerations. HMRC, not surprisingly, do not think in the same way as Joe public.
The position regarding an employee being required to sleep in an individual’s own home is pretty much cut and dried based on recent tribunal rulings. In such a scenario the worker will be required to sleep-in, due to a requirement for round the clock care, or they are required to be available for emergencies.
Whether the worker is awake or sleeping does not matter. The worker is deemed to be working and therefore the payments made must comply with the National Minimum Wage legislation.
Now what about the scenario of an employee in a care home or residential home? Let’s say for the purpose of this article that the home has night workers who are paid the appropriate rates but there is an additional employee who sleeps in and they are only ever required to be awake if there is an emergency.
Apologies for this, but it is necessary to quote from HMRC’s manuals at this point. The National Minimum Wage manual at NMWM08280 states:
‘Any hours where the worker is not working and able to use sleeping facilities will not be treated as working time as long as
- The facilities are suitable for the purpose (for example the worker is provided with a bed in a location where it is reasonable to sleep), and
- The worker is not awake for the purposes of working’
It is of course vitally important to establish if the worker is working or not. Sounds obvious but careful attention is required on this point.
So, according to HMRC, if the worker is not awake for the purpose of working, they are not at work and therefore the NMW regulations will not apply.
This may seem an obvious however current discussions with HMRC on this very point have yet to yield a response from HMRC either way. This may be because HMRC have recently considered sleep-in payments as a whole, and have introduced a Social Care Compliance Scheme (SCCS).
The SCCS gives employers up to a year to identify employees who sleep-in but have not been paid the NMW. Employers who identify such workers by the end of the self-review period have up to 3 months’ to pay the workers.
It is all very well HMRC introducing such a scheme, however they should be in the position to clarify what they mean by awake for the purposes of working.
What employers need to do is critically review the procedures for sleep-in employees who do not receive the NMW and consider whether the worker is actually working or not.
Part of this critical review is to consider the contract of employment and staff handbooks. HMRC, as part and parcel of a NMW enquiry, ask for a detailed understanding of the contractual arrangements. It is vital to set out in contracts of employment that sleep-in employees will only be ‘working’ when they are awake and required to attend an emergency. If the sleep-in employee is working they should be paid the NMW.
Recent Employment Tribunal cases have ruled against employers in this respect but have provided factors which may help employers ascertain if a sleep-in complies with NMW.
- If an employer is obliged by law to have an employee present on the premises for any reason, then this may be a strong indicator that the worker is in fact working by being present, and therefore should be paid the NMW
- If the worker would risk facing disciplinary action if they left for a while, because their continual presence is essential under their contract of employment, then this points towards the possibility that the worker should be on NMW
- The degree of responsibility that the worker has, and the immediacy of the requirement to provide assistance in an emergency.
However for HMRC purposes the NMW manual referenced above should be the starting point for any discussions with HMRC.
We cannot dispute that workers in individual’s own homes should, for the most part, be paid the NMW whether they are asleep or not because this has been decided by the Courts. However within care and residential homes do not adopt a default position of applying the NMW rates. The facts of the situation are the basis for consideration.
If you require any further information or guidance please contact Paul Chappell on 01472 350601.