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The Government has not undertaken a formal assessment of the merits of pro-active investigations but believes they are an important part of enforcement.
HMRC published findings from their targeted social care evaluation on 25 November 2013. Over the period 1 April 2011 to 31 March 2013, HMRC had made enquiries into 224 employers in the social care sector. Of the cases completed by the end of September 2014, HMRC have found non-compliance in 108 (48%) of their enquiries, identifying £1,319,729 arrears of pay for 6,550 workers, with penalties issued with a total value of £146,931.
As part of this targeted enforcement activity, HMRC have collaborated with care sector representative bodies to improve understanding of compliance risks and design controls within payroll systems that prevent workers being underpaid the minimum wage.
The Department of Health has recently published statutory guidance for local authorities as part of the package of secondary legislation that accompanies the Care Act. The chapter of statutory guidance on commissioning and market shaping explicitly states that local authorities should have evidence that contract terms, conditions and fee levels will not compromise care providers’ ability to pay at least minimum wages. A copy of the guidance can be found at https://www.gov.uk/government/publications/care-act-2014-statutory-guidance-for-implementation
The Department of Health is asking all Local Authorities to sign up to the Social Care Commitment which incorporates a statement about employer compliance with minimum wage legislation. The Association of Directors of Adult Social Services has written out to all its members encouraging them to support the Commitment as a way of raising standards in adult social care.
We regularly update our Guidance on Gov.UK and we will continue to work with the sector to improve understanding and compliance.
Any worker who believes that they are being paid below the minimum wage should call the Pay & Work Rights Helpline on 0800 917 2368. HM Revenue & Customs investigate all complaints.