10% of applicants rejected from joining the Social Care Compliance Scheme

Correspondence with HMRC’s National Minimum Wage Enforcement team regarding the Social Care Compliance Scheme (‘SCCS’) has revealed that during November 2017, HMRC rejected 10% of 140 applications for the SCCS. HMRC informed us that the applications were rejected as they failed to meet the eligibility criteria; 

• An employer who provides sleep in shifts 
• Someone who funds their own care or; 
• Someone who receives money to fund their own care

You cannot join if you have previously been prosecuted for underpayment of the National Minimum Wage (‘NMW`), declined an invitation from HMRC to join the scheme or withdrawn from the scheme.

Social care employers may be contacted directly to join the SCCS if HMRC have received a worker complaint.

Social care employers who successfully join the SCCS are granted one year to identify any underpayments of NMW relating to sleep in shifts. Once the self-review period is completed and all underpayments are identified, the employer has three months to repay all past and present workers the NMW arrears. If the employer successfully repays all liabilities within the given timescale they will avoid any financial penalties from HMRC for the underpayment.

The consequences for those applicants who are rejected from joining the SCCS could be catastrophic. Rejection from the scheme has the potential to bankrupt social care employers, such as care homes, as the employer will have to pay penalties on any underpayments of National Minimum Wage over the last six years. There is also a reputational risk as the employer could be ‘named and shamed’ as an underpayer of NMW. Furthermore, by applying to join the SCCS you are alerting HMRC that you have a NMW problem.

Aspire Comment

The care industry are concerned that HMRC’s change of view regarding National Minimum Wage could bankrupt the industry and leave many vulnerable people without sufficient care. The case that changed HMRC’s view Royal Mencap Society vs Tomlinson-Blake is to be appealed at the court of tribunal on 20th-21st March. Please see our previous news article on the Social Care Compliance Scheme and our recent blog.

How does this impact agencies and contracting intermediaries?

Furthermore, the fact that HMRC are rejecting applicants and have not expanded on the reasoning behind this, beyond the broad explanation that the eligibility criteria was not met, raises alarm bells.

It appears that agencies and/or contracting intermediary companies could be at a potential disadvantage in comparison to a social care end user employer who can register for the scheme to take advantage of the penalties amnesty. Our concerns centre on the fact that there is no advantage to such businesses admitting there may have been NMW underpayments, as they have no guarantee that they will be accepted into the scheme as an “employer in the social care sector” and so, no guarantee that such an admission will protect them from suffering NMW penalties and naming and shaming.

Also, it suggests discriminatory behaviour towards workers who undertake sleep-in shifts who are engaged via an agency or contracting intermediary, as these companies may be reticent to apply to the scheme with no certainty that they will be accepted, whilst at the same time pointing a spotlight at their company that there is potentially a NMW issue. Ultimately it means the workers who are not clearly engaged by an end user (such as a care provider) could miss out on the NMW they are due.

HMRC confirmed they do not have any plans to re-assess the eligibility criteria for the SCCS.