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Sleep in shifts - new BEIS guidance on calculating National Minimum Wage

16 November 2018

The Department of Business, Energy & Industrial strategy (BEIS) has now updated its guidance on the National Minimum Wage (NMW) and sleep-in shifts, following the decision of the Court of Appeal earlier this year in Mencap v Tomlinson-Blake.

In the Mencap case the Court of Appeal held that care workers undertaking sleep-in shifts are only entitled to the NMW when they are required to actually be awake. This overturned the Employment Tribunal and Employment Appeal Tribunal decisions that all hours of a sleep-in shift should be paid at NMW. It should be noted that the decision is currently being appealed to the Supreme Court.

Following the original employment tribunal decisions, HMRC launched the Social Care Compliance Scheme (SCCS) which enabled employers to repay money owed to workers by March 2019 without any HMRC penalty. The Court of Appeal judgment has understandably left questions on the way forward for organisations who are currently members of the SCCS.

The updated BEIS guidance clarifies that if an employer provides suitable facilities for sleeping, NMW must be paid for time when the worker is required to be awake for the purpose of working, but not for time the worker is permitted to sleep. However, if suitable sleeping facilities are not provided then NMW must be paid for the entire shift. The guidance goes on to state that the position is different where workers are working and not expected to sleep for all or most of a shift, even if there are occasions when they are permitted to sleep (such as when not busy). In this case it is likely NMW must be paid for the whole of the shift on the basis that the worker is in effect working all of that time.

  • The deadline to register with the SCCS closes on 31 December 2018. For those registered the scheme still requires all assessments of liabilities to be completed by the end of the year and back-payments for sleep in shifts to be paid within 3 months of returning the declaration or by 31 March 2019, whichever is sooner. Payments for any other NMW underpayment discovered must be paid before returning the declaration form.
  • Employers, following the new guidance, will need to carefully monitor time during sleep-in shifts to ensure that workers are paid NMW for the time they are awake and to keep records of doing so. Employers should also keep records of the basis on which they have decided that they have underpaid their workers and how they have calculated what they owe.
  • The position will need to be kept under review in the event that the Supreme Court reverses the decision. We understand that the case is unlikely to be heard before 2019 and possibly not until 2020.

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