Landmark pay case shines light on 'perfect storm' facing care sector, says leading lawyer

Can I make an injury claim on behalf of a loved one following an accident in their care home?

This week, it was revealed that seventeen care workers will be taking legal action against their employer, alleging failure to be paid the minimum wage.

According to trade union, Unison, pay slips show that adult social care contractor, Sevacare, was employing 'live-in' care workers at a rate of £3.27 an hour - then less than half the minimum wage.

Sevacare has contracts with a number of local authorities across England and provides care to an estimated 9,600 people each week. However, the company no longer has a contract with Haringey Council.

The carers concerned say that they were employed to provide round-the-clock in the home of an elderly woman with severe dementia and were each on so-called 'zero-hours contracts'.

Sevacare disputes these claims and says that the care workers were covered by a contract which paid "at least the national minimum wage over any pay reference period."

Reacting to the news, Rachel Adamson, Head of Regulatory Law at Stephensons, suggested the picture was more complex.

“The revelation that care workers may not have been paid the minimum wage should not come as any great surprise to those with knowledge of the sector.

“Recent figures suggest that as many as 11% of care workers are not paid the minimum wage. That is approximately 200,000 people.

“While it would be easy to put this shocking disparity down to wanton exploitation, the truth is more complex. Care providers are facing a ‘perfect storm’ in respect of finances, and the pressure on balancing the books has rarely been greater.

“The introduction of the national living wage and Local Authority budgets that continue to be squeezed means care homes are facing an increasingly desperate financial landscape.

“On top of that, the recent changes in the way providers are inspected by the regulator – the CQC - means that far greater amounts of time and money are being dedicated to paperwork and compliance, rather than frontline care.

“Staff costs already account for more than 60 per cent of old age care expenditure. Of course, the very least that carers deserve is to receive the pay they are due, but without significant investment into the sector it is unclear how care homes can be expected to find the money to do so.”

In answer to the allegations, Sevacare, while stressing it strictly followed its minimum wage obligations, acknowledged the case highlighted areas relevant to employees across the sector, adding: "The fundamental underlying issue undoubtedly is the inadequate funding of social care for the elderly by government."