A Chelmsford home care business has been named and shamed by the Government for failing to pay more than £3,770 to 24 of its employees.
A1 Home Care, based In Chelmsford, was named by the Government for paying an average shortfall of £157 each to 24 staff between June 26, 2015 and November 27, 2016.
But the company’s boss said it was a mistake the Government said their workers were illegally paid below the minimum wage, adding it is an “unfair” and that they have “always paid well above the minimum wage”.
From Thursday October 1, 2015, the adult rate of the National Minimum Wage increased by 20 pence from £6.50 to £6.70 per hour.
Business Minister Paul Scully said: “Our minimum wage laws are there to ensure a fair day’s work gets a fair day’s pay – it is unacceptable for any company to come up short.
“All employers, including those on this list, need to pay workers properly.
“This government will continue to protect workers’ rights vigilantly, and employers that short-change workers won’t get off lightly.”
But Patrick O’Callaghan, the CEO and managing director of A1 Home Care Ltd said they got caught out by making a deduction from staff members’ pay for training.
He said at the time there was no guidance on this and even the HMRC investigation team said it was a grey area.
A1 Home Care offers a full range of help at home, including personal care, meal preparation, housework and laundry services.
He said: “I totally disagree with the decision to name and shame A1 Home Care for mistakenly paying under the National Minimum Wage. My company have always paid well above the minimum wage and at weekends we also pay enhanced rates to staff and on bank holidays double pay.
“Where we got slightly caught out through no fault of our own was by making a deduction from staff members’ pay for training that was given to a new starter free of charge at the time as long as they completed so many hours of work with the company.
“The new staff member signed a training agreement that stated so many hours of work had to be completed and as long as this happened all training was free of charge but if those hours were not completed and they left early then a portion of the training charges were deducted from their last pay.
“Unfortunately this took a few people under the minimum wage at the time.
“At the time there was no guidance on this and even the HMRC investigation team said it was a grey area.
“When I questioned several other care providers in the local area about their take on this, they said that they did exactly the same with new recruits.
“This was back in 2018, I think we were just very unlucky at the time but I do not see this as fair either.
“I agree with naming and shaming companies but not when a genuine mistake was made and at the time this was a genuine unknown mistake.
“We have since changed our procedure with this and our accounts department always checks to make sure all staff are paid well above the National Minimum Wage so that we are not caught out again for any mistakes.”
Following investigations by Her Majesty’s Revenue and Customs, a total of £2.1million was found to be owed to over 34,000 workers.
The breaches took place between 2011 and 2018. Named employers have since been made to pay back what they owed, and were fined an additional £3.2m, showing it is never acceptable to underpay workers.
Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates.
They also face hefty financial penalties of up to 200 per cent of arrears – capped at £20,000 per worker – which are paid to the government. Since 2015 the government has ordered employers to repay over £100 million to 1 million workers.
Chairman of the Low Pay Commission Bryan Sanderson said: “These are very difficult times for all workers, particularly those on low pay who are often undertaking critical tasks in a variety of key sectors including care. The minimum wage provides a crucial level of support and compliance is essential for the benefit of both the recipients and our society as a whole.”
The reprimand comes amid a campaign from UNISON for employees to pay the national living wage.
Research from the Living Wage Foundation suggests that 71 per cent of care workers in Essex – more than 16,000 people – are paid less than £9.50 per hour.
UNISON Eastern social care lead Caroline Hennessy previously called on the council to support care workers more.
She said: “Care workers were virtually abandoned at the beginning of the pandemic, left without enough PPE and dealing with years of underinvestment and under pay.
“But they battled on regardless, doing everything they could to look after Essex’s most vulnerable residents while often fearing for their own lives and safety.
“Providing these key workers with a wage they can actually afford to live on is the least we can do.”
The Government name and shame list can be found here: https://www.gov.uk/government/news/employers-named-and-shamed-for-paying-less-than-minimum-wage