Could there be a wages liability waiting for you?

Category: EQ NewsHealthcare - Posted On: Apr 26 2018


This case relates to a care worker who was paid a flat fee for an overnight stay and only the minimum wage for the hour in the evening where she was awake and working. Last year it was ruled that the minimum wage should be paid for the whole period as she was under the employers control and could be required to work. The ruling on appeal of the Royal Mencap Society v Mrs C Tomlinson-Blake is due in the near future having been heard in late March 2018. The decision on this case could result in large liabilities for businesses in which ‘sleeping over’ is required as the difference between the flat rate and minimum wage would need to be paid to employees, implementing this backdated to the year 2012.

If the decision is upheld by the appeals court then this means that the employers will be deemed not to have paid minimum wage. HMRC have many powers in relation to this including fines and public naming however because the situation was not clear at the time, there are several options given by a new social care compliance scheme to be launched:

• Employers can opt into a self-review period (of up to 12 months) during which they will be provided with some support from HMRC to identify arrears which they may owe staff.
• At the end of the review period employers must pay employees any sums owed within 3 months. Provided the employers pay all liabilities within the SCCS’ outlined timescales, they will not be liable to pay any enforcement penalties.
• Employers who do not opt into the scheme will be liable to normal enforcement powers and penalties from HMRC including fines and public naming.

We will need to wait for the result of the appeal however; you should calculate any possible liability now to be able to ring-fence the funds to ensure you can pay this liability within 15 months.  Contact our specialist Healthcare team for support, email Healthcare@eqaccountants.co.uk or contact your local office.