There’s been a court ruling regarding national minimum wage (NMW) that could have a huge impact on the care industry.

The Court of Appeal (CA) overturned a previous ruling that workers who carry out sleep-in shifts aren’t entitled to the national minimum wage for the time they’re asleep.

Instead, the court ruled that care homes and other organisations only need to pay NMW to workers when they’re awake and working.

The back story

The initial case started with a dispute between the Royal Mencap Society, a charity that helps people with learning disabilities, and one of its care workers. The claimant helped two men with autism and learning difficulties in their home. She worked day shifts on some days and night shifts on others.

The worker didn’t have to do anything during her sleep-in shift—she only had to stay in the house in case the two men ever needed help during the night. She had her own bedroom in the house and spent most nights sleeping. In fact, she only had to intervene six times in the 16 months before the case.

The care worker took Mencap to an employment tribunal because they paid her a flat rate of £22.35 plus an hour’s pay of £6.70 for a nine-hour sleep-in shift. She claimed the charity should pay her NMW.

The Employment Appeal Tribunal agreed with her, and ruled that Mencap had to pay her NMW for the entire time she was at work.

The new verdict

The CA overturned the EAT’s decision and ruled that the care worker was only “available to work” and not actually working. So Mencap didn’t have to pay her NMW.

The court also reversed another key part of the previous ruling: that employers were liable for six years’ worth of back pay if they hadn’t been paying workers the NMW. Now, they don’t have to pay.

How does this affect you?

The care sector is breathing a massive sigh of relief at the latest ruling. Many care homes risked going under if they had been forced to pay back-pay. In fact, the CA’s decision could save the industry as a whole about £400 million.

If you operate in the care industry, you’re probably wondering what your next move should be.

If you didn’t pay NMW to begin with, then you don’t have to do anything.

If you do pay NMW, you need to decide whether to stop paying it from now on. Bear in mind that doing so may not be a good PR move.

It’s worth noting that this ruling doesn’t affect workers who are working during a night shift, even though their employer may permit them to sleep. For example, a night watchman is working simply by being present at the workplace.

It’s not over just yet

The saga doesn’t end here, unfortunately. Unions are unhappy with the latest decision and there could be yet another appeal. So make sure you stay tuned.