UKHCA

United Kingdom Homecare Association
The professional association for homecare providers

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UKHCA Media Release

National Minimum Wage in Homecare Sector - 07/10/2013

United Kingdom Homecare Association today provided the following summary of issues connected with the payment of National Minimum Wage in the homecare sector. The following highlights some of the complexities around this technical issue for journalists, researchers and other responsible commentators (note 1).

The National Minimum Wage (NMW) Regulations require that "working time" is paid at the NMW or above over a pay reference period (according to the frequency that the worker is paid and not more than a month).

In the case of homecare workers (who are generally considered "time workers" for the purposes of the Regulations), "working time" effectively means the time they spend in the service user's home (which we refer to as "contact time") and the time spent travelling between their different visits during the day (where such travel applies for the purposes of NMW).

However, not all travel time counts as "working time". The first and last journey of the day to and from home, for example are excluded, as are a number of other situations.

As a general principle, it is not unlawful for careworkers to be paid by reference solely to their "contact time", so long as the total pay divided by total "working time" ("contact time" and applicable travel time") over the reference period is at NMW or above.

Where careworkers' pay is calculated by reference to "contact time" only, the rate paid for "contact time" must be sufficiently high to comply with NMW, once the applicable travel time is included.

It is potentially misleading to the public to present a simplistic message that careworkers have not received at least the National Minimum Wage where they have been paid solely by reference to the time they spend in a service user's home ("contact time"). Such claims require careful scrutiny, including an understanding of the rate paid for contact time, which is likely to be higher than Minimum Wage.

UKHCA notes that with very few exceptions, councils (who purchase the majority of homecare services), pay providers by reference to "contact time" only, leaving the provider to ensure that they meet the costs of the service, including NMW compliance from this payment. Over recent years, councils have councils have exploited their dominant purchasing power to save money by:

(1) reducing hourly rates they pay to providers either by requiring cost-reductions, or not increasing prices paid in line with inflation etc. and

(2) reducing the length of homecare visits. This increases the length of travel time compared to "contact time" and places an incredible strain on providers' ability to reward their vital workforce for the incredibly important work they do.

UKHCA has worked extensively to highlight the impact of local councils’ price squeeze on homecare services, including employers' ability to keep ahead of NMW and we submit evidence to the Low Pay Commission to this effect on an annual basis. The Commission has repeatedly warned councils to ensure that they are paying the full cost of care, and that central government should investigate council's commissioning practice. We lack confidence that any meaningful progress has been made in either case.

We also note a general lack of easily available guidance from Government or HMRC that deals with the complexity of this issue for employers, a matter which we have raised with the Low Pay Commission, the Department for Business Innovation and Skills and the Cabinet Office.

Ends.

Notes for editors

1. Disclaimer: This media release should not be regarded as a definitive statement of the law in relation to National Minimum Wage. UKHCA accepts no liability for employers or statutory sector commissioners acting, or refraining from acting, based solely on this release.

2. For more information, please contact:

Colin Angel, Policy and Campaigns Director, United Kingdom Homecare Association (UKHCA), Group House, 52 Sutton Court Road, Sutton, SM1 4SL
Mobile: 07920 788993
E-mail: media@ukhca.co.uk
Twitter: @colintwangel

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