National Minimum Wage and sleep-in shifts


There has, historically, been some confusion as to whether, and when, the National Living Wage (NLW) or the National Minimum Wage (NMW) needs to be paid to workers while they are sleeping. HMRC have recently launched a new compliance scheme for social care employers who may have incorrectly paid workers below the legal minimum for sleep-in shifts.

When must the NLW/NMW be paid?

The extent to which a worker must be paid when sleeping between duties depends on whether the worker is still regarded as ‘working’. A worker who is found to be working, even though he or she is asleep, is entitled to be paid the NLW or NMW, as appropriate for their age, for the entire time that they are at work.

A worker may be regarded as working while they are asleep if, for example, there is a statutory requirement for them to be present and they would face disciplinary action if they left the workplace. An example of this may be a person who works overnight shifts in a care home and sleeps on the premises, but there is a statutory duty for someone to be present. Such a person would be considered working for the entire shift, even when sleeping, and would be entitled to the NLW/NMW.

By contrast, a person who works in a pub and lives in a flat above the pub is not likely to be regarded as working, even if they are required to sleep there so someone is on the premises to reduce the chance of being burgled.

Social Care Compliance Scheme

The Social Care Compliance Scheme (SCCS) was launched in November 2017 to help employers in the social care sector with historic underpayments in relation to ‘sleep in shifts’ pay arrears without suffering financial penalties.

In July 2017, the Government announced that they would waive all financial penalties in relation to arrears arising before that date in respect of NMW underpayments for sleep-in shifts. Future underpayments will be subject to the usual penalties.

An interim National Minimum Wage enforcement approach for the social care sector was published on 1 November 2017. Social care employers at risk of NMW underpayments for sleep-in shifts will be offered the opportunity to opt-in to the SCCS (subject to meeting minimum criteria and at the discretion of HMRC). Social care employers who participate in the scheme will be offered a period of 12 months in which to conduct the self-review with access to HMRC technical support and a further three months to pay all arrears due to workers. Providing that all arrears are paid within this timescale, the employer will not be liable to financial penalties and naming and shaming. Regardless of when a social care employer enters into the SCCS, a final deadline of 31 March 2019 applies by which all arrears must be paid to workers.

Social care employers who choose not to opt into the SCCS will not be offered further concessions, will be subject to the usual investigative powers and will face the usual financial penalties (other than in relation to sleep-in shift arrears relating to periods before 26 July 2017).