The Court of Appeal has ruled that carers that sleep overnight at a client’s home, are not entitled to the minimum wage whilst sleeping.

In consideration of Royal Mencap Society v Claire Tomlinson Blake and John Shannon v Jaikisham and Prithee Rampersad (trading as Clifton House Residential Home), the Court of Appeal found that any employee that stays the night at a disabled, elderly or vulnerable person’s home, are only entitled to the National Minimum Wage (NMW) while they are actually performing work, and not for the duration of their sleep-in shift. This is because they are characterised as being ‘available to work’, rather than ‘actively working’.

This decision runs counter to government guidance which stated that sleep-in carers must be paid at least NMW throughout their entire shift, even whilst sleeping.

This guidance coincided with the launch of the Social Care Compliance Scheme (SCCS), a mechanism through which care providers declare non-compliance to HMRC and repay staff. The Government must now clarify what will now happen to those providers that had joined this scheme.

This ruling is a crucial outcome for the care sector, with as many as two-thirds of care providers facing insolvency if they had been required to make the retrospective payments. The back-pay bill was conservatively estimated to be about £400m for the entire care sector, and £200m a year from 2020 if the court had upheld the original ruling that workers should be paid minimum wage.

Garry Humphreys, HR Consultant at EML, comments:

“It is, of course, entirely possible that this decision will be appealed, which will only serve to prolong the uncertainty and anxiety. For now though, it is recommended that care providers “sit tight”, and continue with contingency planning until such time as the legal position is more definitive.”

If you are a care sector employer affected by this issue, please get in touch for advice and support specific to your circumstances.