Care sector is worst offender in UK for failing to pay National Minimum Wage

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The Low Pay Commission and the Resolution Foundation have estimated in two separate studies that around 160,000 people, 11% of workers in the social care sector, have not be receiving the National Minimum Wage.

The findings are highlighted in a National Audit Office report that singles out the social care sector as the worst offender when it comes to non-compliance with National Minimum Wage regulations.

NAO suggests this may be due in part to complex franchise arrangements and paying for travel time, premium services and training.

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The Resolution Foundation estimates that front-line care workers across the UK lost out on £130 million in wages during 2013-14 because their employers did not comply with the National Minimum Wage.

In its two-year review to 31 March 2013, HMRC found that levels of non-compliance in the care sector were higher than in any previous year since 1 April 2008.

The Low Pay Commission continues to assess the care sector as high risk but says that accurately estimating the level of non-compliance in social care has so far proved difficult because of differences in data sources.

The Resolution Foundation believed there were 160,000 direct care jobs paying below the minimum wage in 2013-14.

It also estimates the average annual underpayment as £815 per worker, considerably more than the average arrears across all sectors.

The Department for Business, Innovation and Skills (BIS) is working on tackling the issue. It has re-classified the social care sector as a high priority sector for 2015-16. It was not tagged as high priority in the 2014-15 financial year, which means that other agencies, including the HMRC, were not charged with giving it extra scrutiny.

In the period from 1 April 2015 to December 2015, HMRC closed 172 investigations into the care sector, 91 of which were aged less than 120 working days, and is currently investigating a further 141 employers comprising 107 complaints and 34 proactive risk-based investigations.

Tags : HMRCLow Pay CommissionNational Audit OfficeNational Living WageNational Minimum Wage

The author Rob Corder

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