As we all know, employees are entitled to be paid the national minimum wage (NMW) for any time spent working. Employers who fail to pay the NMW can face not only criminal sanctions, by way of enforcement action and fines by HMRC, but also tribunal litigation from disgruntled ex- and current workers seeking to recover back pay.

In most jobs, it is easy to identify any periods of work for which individuals ought to be paid at least the NMW. In some roles however this issue is far from straight forward, with particular problems arising for night shift workers who are required to complete “sleep-in” shifts whereby they sleep on site in order to carry out duties if required.  

Back in May 2017 the Employment Appeal Tribunal had to decide whether night shift workers who complete sleep in shifts are entitled to the NMW for their whole shift or just the time they spend awake carrying out any duties. In its seminal judgment, the EAT looked at three different cases, two of which involved care workers who, whilst able to sleep over night, were expected to deal with any incidents that arose. For those individuals the EAT confirmed that they were entitled to receive the NMW for the whole of each sleep-in shift.  

Unsurprisingly this decision sent shockwaves through the care sector, with many employers genuinely fearful of how they would be able to meet their obligations. In an attempt to reassure these employers, the Government has today announced a plan to waive any financial penalties issued by HMRC to employers who are found to have underpaid their workers for sleep-in shifts for any shifts that took place before 24th July 2017. They are also going to suspend any further HMRC enforcement activity until 2nd October 2017.

Whilst this will undoubtedly be welcomed by employers in the care sector, it does nothing to limit the impact of the judgment in relation to claims for arrears of pay. As such employers may well still face hefty claims for back pay which, given the back drop of ever-tightening public budgets, could well plunge some in to significant financial difficulty.