If you employ staff to be ‘on call’ overnight or have drivers who travel overnight, then you need to have regard to two recent developments which could potentially change the way you calculate pay.
The President of the Employment Appeal Tribunal has recently issued guidance which has indicated that multiple factors must be taken into account when deciding whether someone is working, and therefore entitled to be paid the national minimum wage (“NMW”), during a sleep-in period.
It is possible for an individual to be “working” merely by being present if they are, as part of their working arrangements, required to deal with an emergency or something unexpected should this arise, but can sleep at all other times.
Key factors in the analysis will include:
the employer’s purpose for engaging the worker – e.g. is the employer subject to a regulatory requirement to have someone present at the particular times in question?
the extent to which the worker’s activities are restricted by the requirement to be present – e.g. could the worker face disciplinary sanctions if they are not around at a particular moment in time?
the degree of responsibility undertaken by the worker – examples given were being there to call out the emergency services in the case of a fire (indicates ‘not working’) compared to someone who has a heavy person responsibility when called upon, such as attending to a disabled resident in a care home context (indicates ‘working’)
the urgency of the requirement to provide services if something untoward were to happen – if the worker is the person who decides whether to intervene and they then intervene when necessary that points towards ‘working’. Contrast a worker who is woken by someone else when some intervention is necessary which points towards not ‘working’ and merely on-call.
The guidance will be of particular interest to employers in the healthcare and hospitality sectors, and any other employers that have on-call arrangements in place.
If you are in any doubt, please get in touch with us as getting it wrong can result in potential civil and criminal penalties.
Slightly under the radar for many, HMRC has, from 6 April 2017, changed the tax treatment of overnight allowances for lorry drivers. For the past 26 years, employers have been permitted to pay overnight allowances free of tax and NICs without the requirement for receipts. This has now changed. These allowances can no longer be paid tax free without a Bespoke Agreement in place with HMRC and an appropriate random checking system.
If you would like any more advice on how to obtain a Bespoke Agreement please get in touch.