Social care charities have spent thousands of pounds assessing a back-pay liability they are now not required to pay, with Mencap estimating the cost at £50,000.
An estimated 1,000 social care organisations, about 400 of which are charities, signed up to the government’s Social Care Compliance Scheme (SCCS) in November 2017. This required them to assess their back-pay liability to staff.
The SCCS was launched after a pair of employment tribunals involving Mencap ruled that social care providers should have been paying their overnight on-call staff working sleep-in shifts the National Minimum Wage (NMW) for all hours at work.
Before these rulings in 2016 and 2017, many providers had only been paying their staff a flat rate fee of about £30 for an entire overnight sleep-in shift with the NMW just applied for hours awake and providing active social care support.
HM Revenue and Customs’ SCCS required all social care organisations to assess how much they had been underpaying staff over the past six years and to subsequently repay all affected staff the shortfall.
But in July last year the Court of Appeal overturned the previous judgements and ruled that the NMW does not apply to sleep-in shifts, effectively making the SCCS redundant.
Despite this, HMRC told social care providers to continue their SCCS assessments and at the end of last year most providers filed returns to the regulator.
Mencap told Civil Society News it filed a “nil return” just before Christmas for its back-pay assessment and it is expected many other charities did the same.
Matthew Wort, partner at Anthony Collins solicitors, said HMRC had just accepted one of his social care clients’ nil return SCCS assessments.
‘Unnecessary exercise and cost’
However, many of these charities have spent thousands of pounds undergoing the complicated task of assessing their back-pay liability before the Court of Appeal ruling, with Mencap estimating it spent about £50,000 doing so.
Learning disability charity Affinity Trust told Civil Society News it even had to hire an additional member of staff to assess the charity’s back-pay liability, only to file a nil return last year.
Leo Sowerby, the charity’s chief executive, said: “It has caused a huge amount of work and therefore cost for organisations like us because, notwithstanding the fact that the Mencap appeal was pending, we had to do all the work on assessing our liability and we even had to hire additional staff to do that.
“It was a very unwelcome and as things stand ultimately unnecessary exercise and cost.”
It raises the question of whether HMRC should have launched the scheme before the Court of Appeal hearing.
The situation could yet change again as workers union Unison is waits to hear whether its application to appeal the latest Mencap ruling in the Supreme Court has been accepted.
If the case is heard and the Supreme Court rules against Mencap, it is likely that HMRC will ask social care providers to make fresh back-pay assessments.
BEIS said the SCCS continues to operate so that care providers can identify and pay any remaining sleep-in shift pay which falls outside of the Court of Appeal judgment and other NMW arrears.
A BEIS spokesperson said: “Any worker who is unsure if they are being paid correctly should speak to their employer or contact Acas for independent advice and support.
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