Guidance

Tell HMRC if you’ve underpaid National Minimum Wage in the social care sector

Get help to work out if you’ve underpaid your workers for sleep-in shifts and tell HM Revenue and Customs using the social care compliance scheme.

Overview

You need to check that you’re paying your workers at least the National Minimum Wage, on average, for the time worked in each period you pay them for (known as the pay reference period). You may have underpaid your workers if you haven’t included any hours worked during overnight shifts where they can sleep on the premises (sleep-in shifts).

Contact HM Revenue and Customs (HMRC) if you need help deciding if your workers are working during sleep-in shifts.

If you think you might have paid your workers less than National Minimum Wage, you can apply to join HMRC’s social care compliance scheme. If you’re accepted onto the scheme and declare any underpayment, you won’t:

  • have to pay the financial penalty, currently 200% of the amount you owe your workers, up to a maximum of £20,000 per worker
  • be publicly named for underpayment of National Minimum Wage

You’re classed as an employer in the social care sector if you provide personal care and other practical assistance for children or adults to help them live independently or improve their quality of life. This can be for reasons of age, illness, disability, pregnancy, childbirth, dependence on alcohol or drugs, or any other similar circumstances.

You can also be an employer as an individual, if you employ someone to provide care for you.

If you’re a care worker, find out what you should do if you think you’ve been paid less than the National Minimum Wage.

Who can join the scheme

You can apply to join the scheme if you’re a social care employer who provides sleep-in shifts. You should be one of the following:

  • an employer
  • someone who funds their own care
  • someone who receives money to fund their own care (such as through a direct payment, social care personal budget or personal health budget)

A representative of one of these can also use the scheme on their behalf. You can’t join the scheme if you’ve previously:

  • been prosecuted for underpayment of the National Minimum Wage
  • declined an invitation from HMRC to join the scheme

Applications will be accepted at HMRC’s discretion.

Contact HMRC if you fund your own care, or receive money to fund your care and need additional support.

Decide if sleep-in shifts are counted as work

Your worker is likely to be classed as working throughout a sleep-in shift if any of the following applies:

  • you’re required by law to have them on the premises overnight
  • you require them to be present on the premises overnight
  • your worker’s contract doesn’t specify the time they have to work and any period that they’re allowed to sleep during a night shift - it doesn’t matter whether you provide sleeping facilities or not
  • your worker’s contract specifies the time they have to work and any period that they’re allowed to sleep during a night shift but you don’t provide suitable sleeping facilities

Your worker is likely to be on-call and not working throughout a sleep-in shift if all the following apply:

  • their contract sets out:
    • their working time
    • any period that they’re permitted to sleep during a night shift
  • you provide suitable sleeping facilities

If your workers are working during a sleep-in shift, you’ll need to check if you paid them at least the National Minimum Wage for time they spent working.

You can apply for the scheme if you think that you may have underpaid your workers.

How to join the scheme

If you’re accepted, HMRC will contact you about your next steps.

If you have a Pay As You Earn (PAYE) reference number or a Unique Taxpayer Reference (UTR) number, you’ll need these details to complete the form.

The deadline to join the scheme is 31 December 2018.

Once you’ve joined the scheme

When you’ve been accepted onto the scheme, you must:

  • review the amount you’ve paid your workers - HMRC will help you with this process
  • return the declaration form, usually within 12 months of receiving it, or by 31 December 2018 if sooner
  • pay your workers any underpayment for sleep-in shifts, usually within 3 months of returning your declaration or by 31 March 2019, whichever is sooner
  • pay your workers any other National Minimum Wage underpayments you discover before you return your declaration form
  • pay any additional tax and National Insurance contributions that result from any underpayment
  • make sure you pay your workers at least the National Minimum Wage for time worked during sleep-in shifts from the point you discover you’ve underpaid
  • keep records of how you decided if you’ve underpaid your workers and calculated what you owe

Contacts

Contact HMRC by telephone on 0300 123 4494 (8am to 4pm, Monday to Friday) for:

  • further information about the scheme
  • help deciding if your workers are working during a sleep-in shift
  • support calculating any underpayment you might find
Published 1 November 2017