National Minimum Wage: Care Sector

Matthew Pennycook Excerpts

Wednesday 23rd March 2016 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this important debate.

My hon. Friends and I are proud that it was a Labour Government who, in the teeth of opposition, legislated for a national minimum wage. That national minimum wage is a right, not an optional privilege. At the moment, anything between 160,000 and 220,000 home care workers are still likely to be paid less than the legal minimum, collectively losing out on nearly £130 million a year, as my hon. Friend said—an average of £815 per worker. That is nothing less than a national scandal, not only because a significant minority of home care workers are being exploited—let us remember that they are low-paid and mostly women, that a growing number of them are migrants, and that they find it very hard to organise collectively because of the irregular and fragmented nature of their work—but because underpayment of the minimum wage on such a scale has a direct impact on the quality and dignity of the care provided to the older and disabled people who rely on that care.

As we have heard, there is a variety of reasons for underpayment of the national minimum wage in the care sector, ranging from hourly rates that are simply below the appropriate minimum wage rate to deductions from pay for unpaid training or business expenses. However, the most ubiquitous reason, in my experience, is that care workers are increasingly paid only for contact time. To be clear, that does not include all the time that many care workers actually spend with each client.

I worked for the Resolution Foundation before I was elected and I did a lot of work on this subject. I spoke to hundreds of home care workers from throughout the country about their experiences. I found that “call clipping” —where home care workers leave earlier than they might want to, to ensure that they are not working for free—does happen, but most stay for far longer than their contracted time. For many of the people being cared for, the care workers are the only people they see for hours at a time, perhaps for the whole day. Home care workers enjoy and value the work they do and they often stay for far longer than they need to, but the added insult for them is that, as my hon. Friend the Member for Sheffield Central said, they are often not even paid for that contact time.

[Melanie Onn]

Is my hon. Friend aware that when home care workers overstay their allotted time they can be subject to disciplinary procedures for failing to follow their company’s rules, which stipulate the limited time they are to spend with each of their clients?

[Matthew Pennycook]

Absolutely—I think that happens quite frequently. The way they are disciplined relates to a point made earlier by my hon. Friend the Member for Sheffield Central. Increasingly, they have to clock in and out, and sophisticated technology is used to monitor the time they are with a client. Yet, on their timesheets and payslips—I have seen many of them and they are incredibly confusing—their employers cannot give them the clear detail of how much they are being paid and whether they are being paid the minimum wage. The law in this area is very clear, and yet we still have hundreds of thousands of workers denied the legal minimum to which they are entitled. So why is that happening? At its root, as my hon. Friend said, is the lack of a sustainable funding settlement for social care, which is the result of successive Governments not doing enough, and we know the 2% precept will do little to address that.

Going forward in the medium term, we need to address the funding gap, which is growing on a yearly basis. Local authorities need to do more to ensure they commission care in such a way as to protect those who deliver it, and the independent care providers who employ the home care workers need to do everything possible to ensure that they meet their statutory obligations. There are good examples in the field, but unfortunately far too many do not meet their obligations. None of that should stand in the way of doing what we and the Government can to end non-compliance in this sector.

A variety of things could be done. To give them credit, some of the steps that the Government have taken have been welcome. For example, fines have increased to 100% of underpayments owed to each worker, up to a maximum of £20,000, and they are set to rise again in April. But the scale of the problem and the small solutions that the Government have proposed are clearly not having the impact that they need to, so more could be done. We could have the six investigations report in a timely manner, and we could do more to name and shame employers. Only 13 small social care providers have been named and shamed so far using the powers introduced in 2014.

We could do more to end the over-reliance on self-reporting and ensure that low levels of arrears are recovered. When an abuse is found, we could investigate the whole workforce at that provider, which currently does not happen. However, even if we did all that, we would still be back here next year or the year after talking about what more needs to be done. The Government must seriously consider amending section 12 of the National Minimum Wage Act 1998 so that we deal with the problem by proactively forcing employers, putting the onus on them to prove that they are paying their workers the minimum wage to which they are entitled rather than the other way round.

The sector employs 1.5 million people and has the potential to grow by another million in the next decade alone. If our country is to have the care service that it needs and that disabled people need, the Government need to do more—and quickly—in terms of recruiting and retaining staff who care about their job and of ensuring that those workers are not exploited.