Home Instead statement regarding National Minimum Wage and Zero Hours Contracts

26 November 2013

Yesterday (25th November) HMRC announced the initial findings and results of their investigation in to employers in the care sector paying workers below the national minimum wage under the headline 'Care sector abuse of minimum wage rules'.

Home Instead is also aware of the current debate regarding zero hour contracts and we are keen to set out our position on these.

We have 150 offices, none of which has, as yet, been inspected as part of HMRC’s investigation.

HMRC say in their announcement that:

  • Care sector workers are in line for nearly £340,000 in back pay as a result of the investigations
  • The employers found to be breaking the law will have to pay over £110,000 in penalties
  • More than 2,400 workers in the care sector were underpaid the NMW in the last two years across the UK
  • Over the two-year period of the initial investigation, HMRC investigated 224 employers
  • Some investigations are ongoing, but to date 88 cases have been found to be non-compliant

The results of the targeted enforcement carried out by HMRC found that the main reasons offered by care sector employers for not paying minimum wage included:

  • Making illegal deductions – mainly uniform costs
  • Not paying for time spent travelling between care visits
  • Not paying for time spent training
  • Incorrect hourly pay rates

It is our stated mission to become the UK’s most admired care company through changing the face of ageing. In addition to this, Home Instead is committed to ‘changing the face of caregiving’ and be the employer of choice in the home care sector.

One of the ways we will change the face of caregiving is by ensuring we treat our caregivers with professionalism and respect and this, of course, includes ensuring they are paid above the minimum wage.

Home Instead is committed to:

  • Ensuring that Caregivers are paid at least the National Minimum Wage – even after travel time is taken into consideration. Because the majority of our home care visits are a minimum of one hour in duration, the impact of travel time on hourly pay is minimised.
  • Paying holiday pay, based on hours worked
  • Paying our caregivers for time spent attending training
  • Ensuring we pay a fair mileage rate.

In addition, our ‘no uniform’ policy means that caregivers are not expected, or made, to pay for one.

Comment on Local Authority commissioning

It is easy to blame employers for not meeting National Minimum Wage requirements, however, it is important to stress that the root problem of poor pay in the sector stems from local authorities driving down the cost of care with rates paid to providers that are unsustainable.

Home Instead does not typically engage in local authority work as we believe that block contracts do not allow for a quality service, based around the needs of an individual.

However, with local authorities commissioning around 80% of all care, the rates that they pay providers naturally becomes the benchmark for the sector and we have to remain competitive compared to LA rates.

That said, whilst it is easy to blame local authorities for driving down the cost of care, Home Instead believes that it is also incumbent on care providers to refuse the poor hourly rates on offer and to simply say ‘no’.

Zero Hour Contracts

The use of zero hour contracts is common practice in the care sector and their use has been called in to question recently, most notably by Ed Miliband.

However, it is practices such as zero hour contracts requiring workers to work exclusively for one company or workers being required to be on call all day without any guarantee of work that the Labour Party is taking exception to. Neither of these practices is condoned by Home Instead.

Home Instead believes that the use of zero hour contracts allows them to be a flexible employer, bringing benefits to their caregivers and clients alike.

Indeed, a survey published today (26th November) by the Chartered Institute of Personnel and Development shows that workers on zero hours contracts are more likely to be happy with their work-life balance than other staff.

Home Instead’s position on zero hour contracts is that, used correctly, they work for both the employer and the employee. The danger comes when employers abuse them.

Zero contracts are used by Home Instead as they are a flexible method of employment that, used correctly, can benefit both employees and employer alike. For example:

  • Many of our caregivers (particularly those who are parents of young children or who care for a family member themselves) are only able to work for us because of zero hour contracts and the flexibility we offer is a reason they join Home Instead.
  • In addition, the vast majority of an individual Home Instead office’s costs are caregiver salaries. As anyone working with Home Instead knows, client needs can change dramatically and often at short notice, as is the case when a client passes away.  In this instance, if a caregiver were not on a zero hours contract then Home Instead would have to keep paying them, even if there was no work for them.
  • And, because we match clients and caregivers, when a caregiver loses a client, regardless of how great a caregiver they are, there may not immediately be a client requiring care who is a good match to them.
  • During the application process, caregivers are asked how many hours they would like to work and when, we then aim to achieve these hours for them.

Ed Miliband has stated the labour party that it will seek to ban zero hour contracts if:

  • They lock employees into only working for that employer
  • Employees have to wait at home on call in case they are needed.
  • It is important to stress that we impose neither of these conditions on our caregivers.

Home Instead does ensure that caregivers are paid the national minimum wage and has recently introduced an employee benefit scheme which is open to all employees – this includes health plans, health & wellbeing treatments and retail accounts.

As stated already, it is our aim to become the care employer of choice and our employment policies are built around the need to treat our caregivers with the same respect that we show our clients.