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Care companies avoid paying the minimum wage

One way councils are dealing with the draconian cuts imposed by the coalition government is to reduce the cost of outsourced care contracts.  Councils are driving down the amount they are willing to pay to below the level at which contractors can afford to pay their care workers the minimum wage.  The head of the Low Pay Commission has warned that rising numbers of care firms have to break the law by employing workers at below the minimum wage.  Care firms are using zero-hors contracts, refusing to pay for travel time between care visits and only paying for time actually spent with clients in an attempt to cope with the low rates offered by councils.

Her Majesty's Revenue and Customs has identified 120 care providers – almost equivalent to one in every English local authority area – for investigation into possible breaches of minimum wage rules.   The idea of only letting public sector contracts to firms paying the minimum, or indeed the living, wage is a good one, but it must be backed up with legislation that stops employers from being able to pay lip service to the minimum wage whilst enforcing terms and conditions that reduce effective pay to below minimum pay levels.

In an article on LabourList, Stephen Cavalier suggest how Labour should amend the law to address three of the main impacts of zero hours working, that would go some way towards stopping the exploitation of care workers.  He suggests that:

Exclusivity clauses require the worker to be available for work and prohibited from working for another employer. These restrictive covenants stop the worker from working. Courts take a tough line on this and will reject a clause which is unreasonable and not justified. A clause which requires a worker to be available at all times and which prevents them working for anyone else, without any guarantee of work or pay, should be outlawed.

Work in the National Minimum Wage Regulations is not just time when a worker is working. It also covers “time when a worker is available at or near a place of work for the purpose of doing time work and is required to be available for work”, except where the worker can be at home. This should be extended to include time when the worker is required to be available for work and is prohibited by the contract from working for another employer. This would have the effect of those periods being included in the calculation of the minimum wage. In practice this would mean that the employer would limit those periods when the worker is “on call” (similar to arrangements in the health service).

Establish a requirement, as with fixed term contract and temporary and agency legislation, to issue a contract for defined hours after a certain period of work. Every contract must include “any conditions relating to hours of work (including any terms relating to normal working hours)”. This should be strengthened to require a minimum number of hours of work and a maximum number of hours when additionally required to be available for work.

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