Minimum Wage Compliance – Background (out of date on sleep in time)

The issue of National Minimum Wage (‘NMW’) compliance remains a recurring problem within the social care sector. According to the Low Pay Commission, compliance problems have been exacerbated by the downward pressure on prices exerted by local councils and a general reduction in the lengths of visits purchased in recent years.

The Chair of the United Kingdom Homecare Association (‘UKHCA’), Mike Padgham, has similarly sought to deflect any suggestion of culpability on behalf of individual employers here, by asserting that this problem remains a ‘symptom of a wider picture of under-funded social care’. This problem therefore requires the resolution of the under-resourcing of state-funded social care services.

The issue is complicated by the fact that perhaps counter-intuitively, there are some people in the sector, and not just purchasers, who actively want to find a way around the regulations, to enable a package of care at home, for instance, to be affordable, rather than necessitating their challenge to social services’ assessment of the eligible need, or making a council decide that a person can only be cost-effectively cared for, in a care home setting, rather than AT home.  A friend, for instance, being paid by way of a direct payment, as a proper employee, for caring for their friend at night, would want to make the role affordable for their friend, and not put their friend, the employer, in breach of the NMW regulations. Therefore, if being given a work-related tenancy of a spare room, avoids the need to pay for hours when the worker is technically working but not in fact required, such as a sleep-in shift, that could be a ‘good’ thing for the disabled person, not a bad thing!


Ensuring compliance


Due to the concern that a number of employers may have unwittingly breached NMW regulations, as a result of the complex working patterns within social care services, the UKHCA has alerted Government, HMRC and the Low Pay Commission to the lack of reliable guidance in this area. HMRC’s report provides the first step towards identifying risk factors within this sector.


Here, the payment of care workers’ travel time was identified as a significant risk factor to full compliance with NMW. Due to the customary practice of local authorities paying organisational suppliers of homecare services solely by reference to the time their staff spend in a service user’s home, it has become common practice for homecare providers to pay their workforce in a similar way. The ‘working time’ that is required to be paid at the prevailing NMW refers both to the time spent in the service user’s home and the travelling time between their different visits during the day (NMW Regulations) (and see Whittlestone). Therefore, employers must make sure that total pay before enhancements, divided by the ‘contact time’ and the applicable ‘travel time’ combined, over the reference period, exceeds the NMW level.

In addition, another risk to full compliance is where an employer uses enhanced rates of pay to incentivise out-of-hours and weekend working, and the very short homecare visits that local authorities now commission as a result of public spending constraints. This is because regulation 31(1)(c)(i) of the National Minimum Wage Regulations 1999 excludes premium payments for ‘time work’ by ensuring that the lowest rate per hour received by the worker during the reference period complies with NMW. Therefore, employers would be unable to claim that they are complying with NMW if this is only the case due to premium payments made, where the lowest rate per hour is in fact below NMW.


National Minimum Wage and ‘on call’ time 


The atypical working patterns of many staff in the care industry has given rise to a problematic relationship between ‘on call’ and ‘sleepover’ arrangements, and the NMW. ‘Work’ is not necessarily defined in relation to any particular or specific activity and employers may find that staff members, who are required to be present but are permitted to pass the time sleeping, may still be eligible for the NMW, because having to be in a particular place at a particular time, is ‘time work’. This finding was made by Mr Justice Langstaff in Whittlestone v BJP Home Support Ltd, where he declared that:


“work is not to be confused with any particular and specific activity.  Colloquially, work might bring to mind images of physical or sustained mental effort.  Neither is necessary for something to constitute work, though the context will be the contract and the facts which surround that contract under which the work is said to be performed.”


The decision in City of Edinburgh Council v Lauder summarised the current legal position in relation to the working patterns within this sector by emphasising the distinction between a job where a worker’s core duties require them to work during the night and a job where a worker is required to be ‘on-call’ (in addition to their core duties). In the former instance, the whole period will count as ‘working’ time for the purposes of NMW, regardless of the frequency of tasks undertaken during this period, and whether or not the worker is free to sleep between those tasks.


Examples include a night watchman or a nurse handling telephone inquiries during the night, because both of their core duties require them to work during the night. As a result, a night watchman who is required to be at a premises for a 14-hour shift, despite only being required to perform specific tasks for approximately four hours of this, would still be eligible for the NWM for the entire shift. Despite being provided with a mattress to sleep on when not required to carry out tasks, they would still be entitled to the NMW for the duration of the shift, irrespective of whether they are asleep or awake and performing tasks. This would similarly be the case for a worker who is required to attend ‘sleep-over shifts’ at a client’s home for a specified period during the night. Despite being provided with a camp bed and permitted to sleep if their assistance is not required, they should be paid the NMW for the entire time that they are present (whether or not they are asleep during this period), because the worker’s core duties require them to carry out such work.


However, in the case of the worker whose job is to be ‘on-call’ in addition to their core duties (for example, pub managers and housekeepers whose duty to be ‘on-call’ during the evenings is additional to their core duties of managing and maintaining their relevant premises), that ‘on-call’ time will be deemed to be ‘working time’ subject to the exceptions in the NMW Regulations. These exceptions state that if the worker was provided with facilities for sleeping at or near their place of work, or the worker’s home was at or near their place of work and they are entitled to spend the time at home, then only the hours spent awake for the purposes of working should be included when calculating the worker’s average hourly wage. Therefore, where a worker, who is provided with a flat at work for sleeping, is required to work a shift throughout the day and be ‘on-call’ at their flat for specified nights, only the hours that they are awake for the purposes of working will be payable under NMW Regulations. These approach would also extend to instances where a worker completed a night shift as a tenant in the service user’s own home, because the worker’s home would be at their place of work. The worker would be entitled to be paid NMW when awake but not when asleep, because the exception to the concept of working time would be triggered.



However, the above exceptions remain inapplicable in certain instances. This was illustrated in British Nursing Association v Inland Revenue, which concerned workers that operated a telephone booking service for a nurse agency. This was carried out from the employer’s premises during the day, with the night shift conducted from their own homes. However, the employers considered that the staff were not working for the purposes of NMW Regulations, when they were not actually answering the phone, and therefore not entitled to NMW during these periods.


Nonetheless, the Court of Appeal found that the employees were doing ‘time work’ when waiting to answer the phone at their own home (and were not simply ‘on-call’). Therefore, the above exceptions did not apply because the nurses were ‘working’ for the whole time that they were waiting for the phone to ring.


Therefore, ‘sleeping-in’ time at work or ‘on-call’ time at home may be accepted as ‘working time’ when the ‘sleeping-in’ time forms a worker’s entire shift, temporally. On the other hand, if ‘sleeping-in’ time at work is additional to basic working hours, this will not generally be accepted as ‘working time’.


‘On-call’ time and the ‘Working Time Directive’


This Directive (‘WTD’) is designed to prevent workers from being forced to work excessive hours, and similarly accounts for workers who are required to be ‘on-call’ or ‘sleep-in’ at or near their place of work. This is relevant to the WTD because of the following rights that the Directive entitles workers to:

  1. A working time-limit of 48 hours a week (although the UK has provided workers with an opt-out from this limit on a voluntary basis).
  2. A minimum rest break of 20 minutes during any day or shift that exceeds six hours.
  3. A minimum rest period of 11 hours between the end of one working day or shift and the beginning of the next (not including the day of the shift changeover)
  4. A minimum weekly rest period of 24 hours, which can be averaged over two weeks.


Whilst, for the moment, ‘sleeping-in’ and ‘on-call’ time count as ‘working time’ for the purposes of the WTD (as established in two decisions of the European Court of Justice – the SiMAP and Jaeger cases), this may not be for much longer. This is because the European Union is currently re-examining the regulations and is under major pressure from employers to change the application of the Directive in relation to such arrangements. Furthermore, it has been established that when workers are ‘on-call’ somewhere other than their workplace (e.g. at home), ‘on-call’ time only counts as ‘working time’ from the time that they are called out.



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