Care workers launch claim against council for failure to pay national minimum wage (NMW)

Tue 20th Sep 2016

Seventeen care workers are alleging that their employer has failed to pay the NMW in one of the sector's biggest ever legal claims. The care workers’ union, Unison has said that the claim involves some of worst breaches of pay rules ever seen.

Workers of Sevacare claim that because they were not paid for travel time between visiting clients, their pay amounted to only £3.27 per hour; less than half the applicable NMW of £7.20 per hour. However, it is Sevacare’s position that its workers were in fact paid £550 per week which amounts to £7.85 per hour and therefore exceeds the NMW.

The workers have also alleged that they were exposed to poor working conditions with one worker likening a particular assignment to being “in prison”. According to Unison workers were required to stay with clients for seven days straight, were on duty for 24 hour of the day and were unable to leave the house. It also alleges that being on zero hour contracts, the workers feared that if they turned down shifts they wouldn’t be offered future work.

Earlier this year, the Resolution Foundation think tank published a report stating that over 160,000 care workers in England and Wales did not receive the NMW. In light of the report, HMRC has announced an investigation into the working practices of the largest care providers in England.

This case acts as reminder that it is important for organisations to comply with their obligation to pay the NMW to all workers and to continually evaluate compliance with this obligation. In addition to helping organisations steer clear of the threat of group legal action, ensuring compliance with the NMW will ensure that worker’s feel valued within the organisation. This will increase productivity, boost enthusiasm and generally maintain a happier workforce.

In order to ensure that they are paying workers the NMW, organisations will need to calculate the total remuneration received by the worker (in the relevant pay reference period) and be clear about how many hours have been “worked”. Organisations often encounter difficulties when determining what constitutes “working time” for NMW purposes and may therefore need to consider seeking legal advice on this point.