Despite the recent Court of Appeal decision that sleeping does not count for national minimum wage (NMW) purposes, HMRC has decided that the Social Care Compliance Scheme (SCCS) should continue irrespective of the result. This decision is likely to have been made on the basis that Unison has applied to the Supreme Court for a right to appeal.
By using the SCCS, there is an opportunity to avoid any financial penalties or naming and shaming publicly where any NMW arrears are paid by 31 March 2019.
In light of this decision to continue the SCCS, care homes should continue to consider what amounts have been paid to staff who work nights in the past and whether this complies with NMW.
The care sector has been left in a difficult position on whether to gamble on the success of the appeal or not, with less than six months of the disclosure opportunity remaining and a decision on whether an appeal can be made unlikely to be given for some time.
If a care home does nothing and the appeal is successful then there will be penalties and it will be named and shamed. If it makes a disclosure under the SCCS and pays the employees and the appeal is unsuccessful then the care home could be out of pocket. HMRC has not yet specified whether it will repay penalties erroneously charged, should the Court of Appeal decision become final. This is an altogether unsatisfactory state of affairs and we hope that improved HMRC guidance will be forthcoming shortly.