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Care workers underpaid by £130 million a year

New study shows care firms regularly breach minimum wage regulations

Mark Gould

Monday, 09 February 2015

More than a tenth of UK social care workers are being paid less than the national minimum wage of £6.50 an hour, a study* suggests.

The Resolution Foundation think tank estimates that around 160,000 people are losing out on an average of £815 each a year - a total of £130 million. It says some care firms are in breach of minimum wage regulations for failing to pay staff when they travelled between clients, on training or when "on call".

The minimum wage regulations say working time includes travelling in connection with work, and training or travelling to training during normal working hours.

The Resolution Foundation, a not-for-profit research organisation, said the problem it had uncovered was "primarily down to the failure of employers to pay staff at a level that adequately covers all of their working time".

The care industry sector, which employs about 1.4 million people in the UK, has long been associated with low pay, while funding cuts and an ageing population is creating an additional strain on wages, it added.

The Resolution Foundation said the total amount that care staff were missing out on was estimated to be about £130m a year, but it could be higher. This is because the study did not take account of illegal deductions to pay which it said was "the most common reason for non-compliance" with the minimum wage regulations.

It is calling on national and local government as well as social care providers to address its concerns.

Resolution Foundation policy analyst Laura Gardiner said: "Diminishing public funding and ever tighter commissioning practices are placing great pressure on care providers, but there is simply no excuse for breaking the law.

"As well as helping to attract and retain staff and boosting the incomes of low-paid workers, better pay would ultimately lead to improvements in care quality."

Colin Angel, of the UK Homecare Association, which represents providers, said they operate in a market where purchasers, largely local councils, "face unprecedented spending constraints".

"HMRC have a responsibility to investigate and, where appropriate, take action against employers which do not pay the national minimum wage," he said. "However, we repeat our calls for commissioners to take the actual costs of care services into account when letting contracts to the independent and voluntary sector, and for government to ensure independent oversight of the practices of social care commissioners."

A government spokesman said: "It is not only unacceptable to pay less than the minimum wage, it is against the law.

"We are taking action to make it easier to name, shame and fine offenders, as well as helping social care workers to recover the hundreds of thousands of pounds in pay owed to them.

"We are also looking at what more we can do to make sure social care workers are paid fairly in the first place."

* Laura Gardiner. The scale of minimum wage underpayment in social care. Resolution Foundation, 09 February 2015.

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