March 12, 2021

The sleep-in pay judgment that could leave care providers with £400m bill

Sleeping

The Supreme Court will on Friday 19 March at 09.45 deliver its much-anticipated decision on whether care providers must pay National Minimum Wage to staff working sleep-in shifts.

If the Supreme Court overturns a Court of Appeal decision delivered in 2018 it will leave care providers with an estimated £400m bill that will, says social care lawyers Royds Withy King, push many into insolvency.

James Sage, Employment Partner and Head of Social Care at Royds Withy King said: “Social care providers have for many years worked on the basis and guidance from HMRC that the National Minimum Wage was not payable for the time staff spent sleeping while at work.

“However, the Employment Appeal Tribunal challenged this and found that sleep-in shifts are working time and subject to National Minimum Wage. In 2018, the Court of Appeal overturned that decision. It was appealed to the Supreme Court which will hand down its decision on Friday.”

The decision will affect care providers and charities providing care services. Mencap alone has reported a liability of £20m and has said that it is at risk of insolvency.

James adds: “The Supreme Court, should it find that sleep-in shifts are subject to National Minimum Wage, will deliver a devastating blow to the social care sector at a time when it can least afford it. It is likely to see many care providers collapse or be saddled with considerable debt.”

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