National Minimum Wage: Care Sector

Debate between Chris Stephens and Baroness Keeley

Wednesday 23rd March 2016 Westminster Hall

[Chris Stephens]

I agree with my Unison comrade and friend. One barrier to getting back-payments in this sector in particular is that the fees charged are often greater than the wages claimed for. I thank her for making that point.

If the green light is to be given to more employers, they will take that. In Scotland, with only two offices—in Glasgow and Edinburgh—to be retained under the proposals, it is simply not credible to suggest that, despite best efforts, HMRC’s minimum wage enforcement can continue at the same level. Given that the workforce in the care sector is female-dominated, it seems that a double whammy is created. We as a society pay women less overall and, even when a legal floor is put in place to stop wages falling below a certain level, many women are victims of their employers’ criminality and earn even less. There can be no place in a civilised society for the law-breaking that appears to be happening in areas of the care sector. A civilised Government should do all they can to stamp out that insidious practice.

Other Members have set the scene. As usual I enjoyed the contribution from the hon. Member for Sheffield Central (Paul Blomfield). He rightly said that the sector looks after the most vulnerable. The hon. Member for Ashton-under-Lyne (Angela Rayner) indicated her personal experience and the right hon. Member for Oxford East (Mr Smith) was correct when he said that it is not unreasonable to demand that the national minimum wage is paid.

[Barbara Keeley]

Many practices have been talked about during this debate, but we have not addressed the new practice of paying care staff by the minute—minute rates. I do not know of any other group of people paid and measured by the minute.

[Chris Stephens]

I am not aware of that either, but it is an important point. Bad employers will try such methods. I am concerned to hear about companies that are trying to get around paying the living wage by taking premium payments off staff. That is another important point that this Parliament will need to address.

Mixed messages are coming from the Government in this regard. Ruby McGregor-Smith, the leader of a home care company that the BBC had revealed was not paying its home care workers the national minimum wage, was recently elevated to the House of Lords. In August 2015, the Prime Minister commented to The Times:

“So to unscrupulous employers who think they can get labour on the cheap, the message is clear: underpay your staff, and you will pay the price.”

Also in the summer of 2015, HMRC launched a national minimum wage campaign that allows employers that have not been paying the national minimum wage to escape punishment. The Government have been saying to companies that HMRC

“will not undertake an enquiry or investigation on your National Minimum Wage records”.

That is a mixed message.

That leaves an over-reliance on workers making complaints to HMRC. As has been revealed during this debate, many care workers fear reporting their employers because reprisals can include dismissal or having their hours cut. As was stated earlier, many home care workers are on zero-hours contracts.

Action needs to be taken. I hope that the Government will give a commitment that where a company is non-compliant, HMRC will extend its investigation to cover that company’s whole workforce. HMRC should publish results regularly, carry out assurance checks in the sector and allow third-party reporting. We have heard from many Members who have spoken so far about the vital role that the trade union movement is playing in the sector. HMRC should maintain records of the number of employees who contact it through the helpline, and there should be a formal protocol for HMRC to ensure that no action is taken against whistleblowers.

Minimum wage rates exist to protect working people and their wages, with a legal floor that stops wages going below a certain level. The insidious practice of not paying the national minimum wage must end, but it can end only if the Government are willing to ensure that compliance with minimum wage rates is monitored rigorously.