The claim against MiHomecare is due to be heard in an employment tribunal in October. If the tribunal finds in the care worker’s favour and agrees that her travel time counts as working time for minimum wage purposes, this may have implications for the working hours and rest breaks given to such workers, and could mean employers will have to review their compliance with the Working Time Regulations 1998.

Most workers are entitled to the NMW, a specific minimum hourly rate, although the entitlement may vary for certain categories of worker, such as apprentices, interns and ‘piece workers’ (those paid according to the number of items they produce). All employers are required to pay it, regardless of their size. Last month the government announced that from April 2016, workers aged 25 and over will be entitled to a premium which will be added to the NMW, which afterwards will be known as the ‘national living wage’. The first premium will be set at 50p, effectively increasing the NMW to £7.20 for these workers.

The claimant, Caroline Barlow, worked for the care provider for four months, during which she attended between eight and 12 appointments each day with elderly or disabled patients at their homes across rural Devon. She says she would spend anything between 15 minutes and one and a half hours driving from one appointment to another. This meant that her working day would frequently last 12 hours, although she was only paid to work 7.5 hours a day. She was paid an hourly rate of £7.68, but claims that the unpaid hours spent each day on the road meant her actual hourly rate was brought below the current minimum wage rate of £6.50. She claims that because travel between appointments was an integral and necessary part of her job, this time should have counted as time spent working, for which she was entitled to receive the minimum wage.

If the claim is successful, it could open the floodgates to thousands of similar claims against her ex-employer and other care providers. Employers in other industries, such as cleaning companies and any other service provider that does not pay its workers for travelling time between assignments, may also be affected. Employers may face the prospect of paying millions of pounds in historic underpaid wages for travel time, as well as increased wage bills following the introduction of the national living wage next year.

Employers that pay less than the minimum wage risk civil or criminal sanctions resulting from enforcement action by HMRC, as well as exposure to claims from workers in either an employment tribunal or the county court for an unlawful deduction from wages. Employers are required by law to keep records of the hours worked by and the payments made to workers, and these records are critical to an organisation’s ability to defend successfully any allegations by workers claiming they have not been paid the minimum wage. Workers have a right to request copies of these records, and if they are not provided within 14 days, the worker may bring a claim in the employment tribunal.

It is, therefore, good practice for employers to maintain and regularly audit their records to ensure they are compliant with the minimum wage legislation. This will involve:

  • identifying the appropriate pay reference period for each worker, and the total gross pay paid to that worker for that reference period
  • determining what type of work the worker does and what hours will count for the purpose of entitlement to the minimum wage
  • dividing the total gross pay for the pay reference period by the hours that should be counted for national minimum wage purposes during that time.