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Ten per cent of care workers on less than minimum wage

Posted on the 11th February 2015

More than 10 per cent of social care workers are paid less than the national minimum wage and their employers are depriving them illegally of about £130m a year, according to research.

The figures from the Resolution Foundation, a think-tank, highlight the problems of poor pay and insecure employment in the social care sector, where local authority funding has been squeezed and care providers’ profit margins are often wafer thin.

The Resolution Foundation said there was now “widespread wage theft” in the sector because some employers were not paying their staff for the time they spend travelling between clients, nor for time spent training or being “on call”. It estimated that 160,000 care workers of a total 1.4m were paid less than the minimum wage and each one missed out on an average £815 a year as a result.

Laura Gardiner, a senior research analyst at the think-tank, said the figures were “scandalous” and called on HM Revenue & Customs to be tougher on employers who did not pay the legal minimum wage. “Social care will need to fill up to a million additional jobs in the next decade to meet the needs of our ageing population, so tackling the broader issue of low pay in this sector is a real priority,” she added. “If we want to see dignity for those receiving care then we need to start investing in the workers who provide it.”

The Low Pay Commission, the independent body that recommends national minimum wage rates to the government, has warned for several years about illegal non-payment in the social care sector. Its own research suggests about 10.6 per cent of workers are paid less than the minimum wage. The LPC has been critical of the government for not doing more to address the underlying issues, which it thinks stem from the way local authorities commission care from the providers. “In many instances local authorities froze or reduced fees paid to care providers, paying increasingly for very short care visits and linking payment to user contact time only — often with no recognition in care fees of travel time or travel costs,” the LPC wrote in a report last year. “Increasingly contracts did not guarantee providers a particular volume of business, with representatives of care providers pointing to instances of care fees too low to enable their members to discharge their statutory responsibilities, including payment of the national minimum wage.”

In 2013 the LPC recommended that contracts issued by public bodies that commissioned social care should contain a clause requiring at least the national minimum wage to be paid and called on the government to take responsibility for bringing that about. However, the government chose not to follow the recommendation. The Resolution Foundation said the government had stepped up its efforts to tackle the problem: between 2011 and 2013 HMRC recovered £338,835 pay arrears for 2,443 workers in the sector, leading to penalties of £112,786 being charged to the companies. However, the think-tank said the arrears collected were “very modest” given the scale of minimum wage non-payment.

Professor Martin Green, chief executive of Care England, an industry body, said “The vast majority of social care employers do pay the minimum wage. However, we are in a system where no one is monitoring the commissioning practices of Local Authorities and they are seriously underfunding both residential and domiciliary care. “If the Local Authority will not pay for travel or sleep in time then providers cannot pay it. The law is one sided because it attacks the provider of care and ignores the role of the commissioner”. Colin Angel of the United Kingdom Homecare Association, said the report “adds to the growing concerns over an underfunded care system”.