National scandal of care workers illegally paid £5 an hour

Some care workers are being paid as little as £5 an hour – well below the legal minimum wage – reveals a new report today from independent think tank the Resolution Foundation which describes the practice as a “national scandal”.

The study shows that while headline pay rates for care workers who visit clients at home are set at or above the national minimum wage of £6.19 an hour, in practice those workers often lose at least £1 an hour because they are not paid separately for the time spent travelling between appointments and because providing decent care often takes longer than the time allocated by the employer for each visit. This would mean that over the course of a year, a care worker who spent an average of 35 hours a week at work for 48 weeks would lose out on more than £1600.

There are an estimated 2 million care workers in the UK, 830,000 of whom are “domiciliary” care workers, carrying out home visits. It is estimated that up to 220,000 of all care workers may be paid less than the minimum wage. Last year HMRC, which is responsible for enforcing the minimum wage, served notices on 879 employers (in all sectors) advising them of underpayments to staff.

The Resolution Foundation report, Does it Pay to Care?, looks in depth at the “work diaries” and payslips of care workers doing home visits to show how their real pay levels do not reflect the hours they work. It reveals how a typical working day can run from 7am to 10pm, with care visits concentrated in morning and afternoon/evening slots to help clients bathe dress and eat. Workers are given time slots in which to complete each visit, which can be as little as 15 minutes, for which they are paid. But the time taken to travel between appointments, sometimes involving journeys of more than 20 miles, are often unpaid – driving their overall pay rate below the legal minimum.

In their diaries care workers also explains the pressures they are under to give people the care they need in the short time available:

• Janice, from Newcastle, describes a scheduled 30-minute visit to make lunch for a client which becomes more demanding because the man, who is incontinent, is desperate for a shower. Rather than leave him either hungry or dirty, Janice extends her visit (“He begs me to assist him and I just can’t say no”) to 40 minutes – even though she knows she will not be paid for the extra care time. Janice is officially paid £6.25 an hour but the Resolution Foundation report shows her actually hourly rate works out at £5.06
• Sharon, from County Durham,has a working day that begins at 6am and finishes well after 7pm. She is not paid either for the time travelling between appointments, which can be up to 20 minutes, or for the petrol she uses for work. With overrunning appointments, such as when she arrives at a client’s home to find they are still fast asleep, she works for more than 10 hours but is paid for just 8: “I finish up and head home exhausted having, as always, run a good few hours over what is down on my paper schedule”. Sharon is officially paid £6.50 an hour but the report shows her actual hourly wage is £5.14 an hour, or as low as £4.15 an hour once the cost of petrol is deducted
• Miranda , from London, takes the bus between appointments and has to pay for her own travel – on journeys that take more than half an hour. She says that by 9am: “I’m already 30 minutes behind my schedule but that’s normal as the schedules are never realistic”. Like most care workers she has unpaid breaks between appointments during the day and sometimes is forced to kill time in the park while waiting for her next appointment as she doesn’t have time to go home. Miranda is officially paid £6.78 an hour but her actual pay rate is £4.80 once bus fares she uses at work are deducted

The report says that while breaches of the law are common, the enforcement regime for the national minimum wage puts the onus on workers to raise a complaint against their employer – something they are often unwilling to do. At the same time the complex information on timesheets and payslips makes it difficult to be clear about the real hourly rate being paid. Yet the National Minimum Wage Regulations clearly state that travel time, excluding the first and last trip of the day, should be paid – except in the case of self-employed workers. The Resolution Foundation report also calls for stronger penalties for firms breaching the law on the minimum wage. The current maximum is a fine of just £5,000.

In the care sector, the rising cost of providing care for an ageing population has put huge pressure on budgets. The report says that, with dwindling resources, many local authorities have lowered the price they will pay care firms to take on the work, with the result that firms increasingly compete to lower their costs to win business. In many cases this has led care firms to adopt non-standard contracts which pay workers only for “contact time” and which push them to cram work into the shortest possible slots.

The report makes a series of recommendations to tighten enforcement, protect workers and reform the process of commissioning care. They include:

· Abolition of 15-minute care slots and an end to work schedules which over-cram appointments

· Increasing the penalties facing companies which break the law

· Clearer payslips, including average hourly rates, so care workers can see exactly how they have been paid

· Ensuring care firms include a reasonable payment for staff travel time when bidding for contracts

· A greater role for local authorities in monitoring legal compliance, more resources for HMRC’s compliance unit and a focus of resources on care work, as a high risk sector

· Considering making both local authorities and care firms legally responsible for payment of the minimum wage to care workers. Ensure local authorities factor in the cost of the minimum wage when calculating the price they will pay for care and stipulate that care workers receive an hourly rate which includes travel time

· Better government guidance for the social care sector on applying the minimum wage

The report, which was supported with a grant from Unbound Philanthropy, says the recommendations should form part of a wider shift in the culture of care in which cost is increasingly linked to good quality care rather than the time taken and the number of visits carried out.

Vidhya Alakeson, deputy chief executive of the Resolution Foundation said : “Every worker has the right to the minimum wage and it’s scandalous that so many care workers, who do such demanding and valuable work for what is already low pay, are deprived of that right. Some care firms are breaking the law and often they’re getting away with it.

“We hear a lot about the need for dignity in social care but how can we achieve that if care workers are under such pressure in their jobs and not paid even the basic wage? The government has signalled it wants to take this issue seriously, which is welcome, but the care system itself needs reform to wipe out this kind of abuse. If we believe in better home care for people we should start investing in the workers who provide it.”

Ends

Notes

1. Does it pay to care? Under-payment of the National Minimum Wage in the social care sector, by Matthew Pennycook, will be published by the Resolution Foundation at 10.30pm on Wednesday 28 August. The report is part of the foundation’s research into precarious employment and is supported by a grant from Unbound Philanthropy

2. The names of care workers in the report have been changed to conceal their identity.

3. Analysis by Dr Shereen Hussein of King’s College London published in 2011 estimates that the total UK social care workforce is around 2 million and that, at a conservative estimate, there is between a 9 and 12 per cent probability that each is paid less than the national minimum wage – between 156,673 and 219,241 care workers http://www.kcl.ac.uk/sspp/kpi/scwru/pubs/periodical/2011/issue16.aspx