“Sleep-ins” – a bad dream?

Sleep-ins have become a difficult and worrying problem for many social care providers in recent years. It is an issue live in current politics and one which is subject to regulatory intervention and litigation.

The background

Traditionally, staff in the social care sector who undertake sleep-in shifts for clients have been paid a set sum, or allowance, for each sleep-in shift. The expectation is that the staff can and should sleep on site but they may be called upon to assist a client at night. Very often this is in conjunction with other “waking nights” staff. That allowance varies between providers but has tended to range from around £15 to £45 for the night.

Those sleep-in allowances are not at national minimum wage levels but when the National Minimum Wage Regulations were originally implemented in April 1999, they were not expected to have any impact on support workers who were undertaking sleep-in shifts. The Low Pay Commission recommendations were: “for hours when workers are paid to sleep on the premises, we recommend the workers and employers should agree their allowance as they do now”.

However, when implemented, the National Minimum Wage Regulations did not expressly adopt the Low Pay Commission’s recommendations and even in 2003, the Low Pay Commission was recommending clarification of the guidance and Regulations.

In more recent years there have been a number of challenges to whether the National Minimum Wage should apply to sleep-ins, with well known cases of Whittlestone –v- BJP Home Support and Esparon (trading as Middle West Residential Care Home) –v- Slavikovska and, in May 2017, the Mencap case. In these three cases, the sleeping
employee has been found to be “at work” whilst asleep and so their sleeping time is therefore included in the National Minimum Wage calculations. In the latest Mencap case, the President of the Employment Appeal Tribunal found that it was always a question of fact whether an employee was “working” whilst asleep.

The current position

The introduction of much higher National Living Wage rates were predicted to have a substantial impact on the social care sector. This has proven accurate and brought the issue of sleep-ins into sharp focus:

• The Mencap case is only one of a number of similar claims affecting the sector, with some unions actively promoting claims by both existing and former staff;
• Local Authorities and other commissioners for social care are struggling with funding;
• Many commissioners, though inconsistently not all commissioners, have continued to themselves pay only allowances for “sleep-ins” without recognising or taking into account the looming crisis amongst providers;
• HMRC is the regulator for the National Minimum Wage. They are responsible for investigating complaints, applying penalties and imposing back pay, as well as “naming and shaming” offenders and they have begun examining sleep-in payments more consistently;
• The political consensus that was beginning to develop was overtaken by the 2017 general election and wider politics.

 “Waking up”

Mencap have indicated that they will appeal the Employment Appeal Tribunal judgment to the Court of Appeal but that is not likely to be considered until early 2018.

Mencap, having lost their appeal, began political campaigning in earnest. They combined their campaigning alongside other social care providers and industry organisations and this has begun to re-establish some political momentum and media attention. Political leaders are again aware of the crisis. There is potentially £400 million owed in sleep-in back pay to thousands of workers in the sector. The most immediate and obvious action taken by government as a result was in July 2017: HMRC suspended their enforcement of the National Minimum Wage for sleep-ins.

Whilst HMRC enforcement is currently suspended, this cannot continue indefinitely and it remains to be seen what substantive proposals the government have. Nevertheless, it is unlikely that government will suddenly and entirely exonerate all social care providers of their National Minimum Wage responsibilities.

In the meantime, users of social care who hold personal budgets have tended to be lost in the debate. They too pay sleep-in allowances and they may also be caught by the underpayments and back pay problem either with the agencies they use or if they employ covers directly. Any response by the government, including legislation, should take account of these service users too.

The future

There remains an expectation that government will not remove all potential liabilities for all social care providers (and those holding personal budgets). Providers should therefore review their sleep-in arrangements to fully understand whether there are potential back pay liabilities. A precedent was perhaps set in 2015. Faced with volumes of holiday back pay claims, the government imposed a legislative limit on back pay claims, reducing the six year limit to two years. This may be something the government would consider here.

The question of whether sleep-ins count as part of the National Minimum Wage though is still a question of fact but assuming they do, providers should:

• Consider the value of potential back pay claims
• Ensure that the quantification and valuation of back pay is based on current National Minimum Wage rates
• Develop strategies for the future to accommodate back pay liabilities as well as future payments. These may include:
  • accurately establishing the nature of sums taken into account for the National Minimum Wage Sleep-ins do not necessarily need to be paid at National Minimum Wage rates if overall pay for staff is compliant with the Regulations
  • liaise with commissioners and negotiate increased payments
  • review all contracts to potentially cross-subsidise minimum wage gaps
  • consider all terms and conditions of employees and whether they are sustainable going forward.
  • use reserves
  • join with or continue participating in the political
    debate.