Social Care: Minimum Wage Back Payment

Business, Energy and Industrial Strategy – in the House of Commons at 12:00 am on 7th November 2017.

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Photo of Nick Smith Nick Smith Opposition Whip (Commons) 12:00 am, 7th November 2017

What discussions he has had with Cabinet colleagues on providing funding to ensure minimum wage back payment in the social care sector.

Photo of Paula Sherriff Paula Sherriff Shadow Minister (Equalities Office) (Women and Equalities)

What discussions he has had with Cabinet colleagues on providing funding to ensure minimum wage back payment in the social care sector.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I have worked closely with ministerial colleagues to implement a national minimum wage enforcement approach that protects the interests of social care workers and vulnerable service users. The Government recognise the financial pressures that some providers face, and we are exploring further options to minimise any impact on the sector. Any intervention would need to be proportionate, and the Government have opened discussions with the European Commission about issues relating to state aid.

Photo of Nick Smith Nick Smith Opposition Whip (Commons)

I thank the Minister for that answer, but how are the Government supporting individuals with personal budgets who could face bills of thousands of pounds in back payments?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

We recognise that such individuals can be among the most vulnerable in society, and we are working to ensure that that group receives the necessary help and support. We expect local authorities to work with Her Majesty’s Revenue and Customs to ensure the right outcome for such individuals, but it is only fair that the budgets provided to personal budget holders reflect their legal obligations to pay the national minimum wage to workers on sleep-in duty both now and when it comes to any arrears owing.

Photo of Paula Sherriff Paula Sherriff Shadow Minister (Equalities Office) (Women and Equalities)

If enforcement action results in the closure of or disruption to service providers, how will the Government guarantee that vulnerable people will not be left without services?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I would like to reassure the hon. Lady that the new social care compliance scheme will give providers up to a year to identify what they owe to workers and will be supported by advice from HMRC. Employers who identify arrears at the end of the self-review period will have three months to pay workers, so the scheme is designed both to support workers and to ensure the continuation of the crucial services that providers perform.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

The Government’s new interim compliance scheme, announced last week, unfortunately adds to the uncertainty facing the social care sector. May I urge the Minister to do all she can to ensure that, as quickly as possible, the Government get back round the table with the sector to find an acceptable long-term solution?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I assure my hon. Friend that we are working very hard across Government with the Department of Health and the Department for Communities and Local Government to continue our discussions with the Treasury about possible solutions to the long-term viability of certain providers.

Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton

I welcome the Government’s efforts to try to find a permanent solution to sleep-in shifts. The situation arose from a change in guidance following an employment tribunal in 2014. Would it not be sensible to consider revisiting the legislation in this place simply to return to the pre-tribunal position?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

We have made it clear that we expect all employers to pay workers according to the law, including the national minimum wage, for sleep-in duties. It is not uncommon for employment law to be clarified in the courts and tribunals, and this issue has been the subject of a number of cases. Even if we were to do as my hon. Friend suggests—we will certainly not be revisiting the legislation—it would not have any impact on workers’ eligibility for historical back-pay liabilities.

Photo of James Frith James Frith Labour, Bury North

This week is Living Wage Week. Some sectors in the UK are better predisposed than others to paying higher wages, but the rising cost of living applies to all. What will the Minister do to incentivise businesses in all sectors to sign up as living wage employers?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I applaud the work of the national Living Wage Foundation, but we have a crucial role to play in ensuring that Her Majesty’s Revenue and Customs has the resources to enforce the minimum wage, where it needs enforcing. That is our priority, although obviously I respect the work of the Living Wage Foundation.