Summary and implications

The Government has recently published its latest list of 115 employers who have failed to pay the national minimum wage (NMW) to all their workers. According to the TUC, the list of offenders is only the tip of the iceberg.

No large healthcare organisations have been identified on the latest list, but several small care providers have been "named and shamed". Employers in both the healthcare and social care sectors are particularly vulnerable to inadvertently paying workers below the National Minimum Wage, due to a combination of low wages and erratic working hours.

We suggest seven top ways that healthcare providers may be inadvertently failing to comply with the National Minimum Wage, and the steps to address them:

  1. Miscalculation of "working time": It can be difficult for employers to determine when a worker in the healthcare sector is working for NMW purposes. Particular issues include workers who are "on call" and workers who are travelling to/from their first or final appointments (see our latest Healthcare briefing here for further details).  Healthcare employers should take specialist advice on any grey areas.
  2. Overtime: Healthcare employers should closely monitor the hours of employees who are engaged on a low monthly or annual salary and who are expected to work overtime without additional payment. Without careful monitoring it is easy for employers to accidentally under-pay such workers in busy times.
  3. Volunteers: Employers in the healthcare sector often rely on the services of volunteers. Workers should normally be paid for work performed, except where a specific exemption applies (e.g. volunteer work for a public body, such as a hospital). Healthcare employers who rely on the services of volunteers must be confident that they are covered by an exemption.
  4. Miscategorisation of workers/employees as "self-employed": Care workers are sometimes engaged on a self-employed basis. Genuinely self-employed care workers will not be entitled to the minimum wage. But employers do not always pay sufficient attention to the correct legal status of their workers. This can be a very expensive mistake.
  5. Benefits in kind and deductions: Healthcare employers should ensure that they are not counting benefits in kind towards NMW pay, and that deductions are being treated correctly. Accommodation is the only benefit in kind which can count towards a worker's pay for NMW purposes. Where an employer makes any deductions from a worker's pay to cover the cost of items which are necessary for the worker's job (such as work clothing), NMW pay will be reduced. 
  6. Salary sacrifice: Healthcare employers can unwittingly agree to salary sacrifice arrangements which reduce the basic pay of low-paid workers below the threshold for the NMW. Pay levels post-salary sacrifice must be monitored.
  7. Failure to keep pace with the NMW: The NMW usually rises each year in October. The latest rate (applicable from 1 October 2015) is £6.70 per hour for workers over 20 years of age. Smaller employers can often be caught out by the rise. Also, employers that engage younger workers can forget to increase their pay when they hit one of the age thresholds. Workers aged 16–17 must be paid at the minimum rate of £3.87 per hour and workers aged 18-20 must receive £5.30 per hour. Apprentices must receive £3.30 per hour.

Healthcare employers should remember that the maximum penalty which may be imposed for failing to pay the NMW has recently increased to £20,000 per unpaid worker. In addition, employers must pay arrears of wages directly to the unpaid employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.