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Do you need to pay National Minimum Wage for sleep-in shifts?

Back in April 2017, a court ruling was made regarding the amount of pay carers and personal assistants (PAs) working sleep-in shifts were entitled to. The ruling was interpreted as meaning all workers were entitled to National Minimum Wage (NMW), even when working sleep-in shifts.

A new court ruling has now been made, completely changing this interpretation of the law. Here at Fish, we appreciate that employing your own carer or PA can be complicated, so we’re here to answer some common questions about the new court ruling.

Do I have to pay minimum wage for every hour of my carer’s sleep-in shift?

The latest case law ruling on this issue says that if your carer or PA performs ‘sleep-ins’, where they need to be at your home during the night time (in case there is a need to assist you) but spend most of the shift sleeping, they do not need to be paid NMW when they are asleep. NMW is only payable when the carer or PA is awake for the purposes of working.

What does this mean for you as an employer?

The means that you do NOT need to pay NMW for all sleep-in hours your carer or PA works. You only need to pay NMW for the time where your employee is awake and working (whether this is during the day or night).

What do you need to do following the change to NMW for sleep-in shifts?

If you currently do not pay NMW for sleep ins – you do not need to change anything. If you pay a flat amount per night for sleep-ins, you should ensure that your employee’s pay does not fall below NMW when all time spent working (including time when the worker is woken to work in the night) is factored in.

If you had started to pay NMW for all sleep-in hours because you thought you had to – you can stop this practice for all new employees taken on from now if you wish. However, you must be aware that this law could change in the future if there is a further appeal, meaning the previous decision that NMW is payable for all sleep-in hours may be reinstated.

Do you have to pay carers minimum wage for sleep in shifts?
Do you have to pay carers minimum wage for sleep in shifts?

Approach with existing employees

If you had previously been paying NMW for the entire sleep-in shift and you now wish to stop, your approach to this will depend on how you made the change to pay in the first place.

If you formally confirmed a change to your employee’s payment terms and conditions:

You will need to formally make another change to terms and conditions. This means you will need to have a consultation with your employee to try and reach agreement. If you can’t reach a suitable agreement, you can undertake a dismissal process and re-employ on the basis that you no longer pay NMW for all sleep-in hours, only for hours spent awake for the purposes of working. Because this includes a dismissal, it is important to get the procedure correct to avoid risk of any claims at tribunal.

If you made no formal communication of change to your employee’s payment terms and conditions:

If you simply began to make extra payments to your employee without communicating anything formally, you could take the approach of explaining to the employee that it was an accounting error made on an interpretation of the law which has now changed, and this will now stop. Technically then, the extra payments will be an overpayment which you could seek to recover. However, you should consider whether this is the best way forward from an employee relations perspective.

If you communicated the change to your employee’s payments terms and conditions as a temporary measure:

You can now simply tell employees that the temporary measure is over, and their payment terms will go back to how they were before the change.

Funding to pay NMW

If you had previously started paying your Carer or PA NMW for sleep-in hours because of the last court ruling, you may have been given or promised further funding from your Local Authority to help with costs. You might even have been given extra funding from their Local Authority to cover the extra cost. It’s possible that the Local Authority may now decide not to provide the extra funding they promised or may rescind any extra funding given to you.

If you have a Full Cover Independent Living Insurance policy with us, you’re entitled to 24-hour help with Employment Law, HR, and Health & Safety issues from Peninsula. If you have any questions regarding wages and how this new court ruling impacts you and your employees, please get in touch with Peninsula.

You can call Peninsula on 0344 892 2480, quoting reference number FIS033 and your Fish Insurance policy number when you call.

Please note that this content was correct at time of publication (12.02.2020). From time to time, changes in regulation may impact the accuracy of the information provided.

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