Sleep-in pay crisis: Should you join HMRC's new Social Care Compliance Scheme

The Government’s latest response to the sleep-in pay crisis is the introduction of a new Social Care Compliance Scheme (SCCS).

Under the scheme, providers who have not paid sleep-in shifts in compliance with the National Minimum Wage can self-assess their non-compliance and repay workers with protection against HMRC enforcement action.

This is the Government’s second intervention in the sleep-in crisis. In July 2017 it waived HMRC penalties (200% of the amount owed to workers, up to a maximum of £20,000 per worker) for non-compliance with the National Minimum Wage prior to 26 July 2017.

Why has the SCCS been introduced?

The Scheme has been introduced as means of encouraging providers to refund workers for any underpayments relating to sleep-in shifts.

A lack of clarity in the law, misleading HMRC guidance, and insufficient funding from local authorities has resulted in an industry wide practice of paying low flat fees for sleep-in shifts on the basis that they are not ‘working time’ for National Minimum Wage purposes. 

However, in a recent ruling against Mencap the Employment Appeal Tribunal confirmed that sleep-in shifts are subject to the National Minimum Wage. As a result it has been estimated that there is £400 million of liability in the sector. 

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