Care companies are being taken to court accused of failing to pay even half the national minimum pay rates, according to Caryl Thomas, director of Caerphilly-based firm The HR Dept.

Seventeen care workers from Haringey, backed by Unison, are behind the claim.

The care sector is under particular strain due to shortfalls in local authority funding, but the issues involved may affect many other businesses. Caryl Thomas said: “Misunderstanding whether travel time is payable is one of the biggest pitfalls.

"Last year, European judges ruled the time spent by an employee (with no fixed office address) travelling to their first appointment should be paid, and from the last appointment to home too. Care workers are an obvious group that this could apply to, but there are many other people who could be affected.”

If this is relevant to an organisation and isn’t being implemented, management should not only take action to rectify it, but also review whether the extra working time means that minimum wage levels have been breached. As well as back pay being required, there are stiff penalties (up to £20,000) from HMRC for failure to comply with the minimum wage.

“A further complication in this case”, said Caryl, “is average pay rates. Workers were paid for an average of 10 hours a day, but some were providing 24-hour live-in care. With heavy ‘out of hours’ demands, or time ‘on call’ being used extensively, the claim is that, again, this has dragged employees’ remuneration well below the minimum wage.”

When it reaches its conclusion, this landmark court case will provide extra clarity in this area. In the meantime, The HR Dept would advise organisations to give consideration to these issues around the definition of working time and minimum wage levels, and keep good records of what they do.