NLW

How to make sure your start-up doesn’t break the law

The National Living Wage is going up in April by 6.7% and we’ve been having conversations in our network about what that means for us.

If you’re new to the sector, pay structures in homecare is confusing at best, and at worst, illegal. Care Pros are often paid per visit, with mileage paid on top of this to reimburse for travel expenses.

However, you need to make sure that the Care Pro needs to earn the NLW throughout their shift.

For example, if they’re working 7am to 2pm, with short gaps between clients for travel time, they need to earn, in April, a legal minimum of 7*£12.21 =  £85.47 for that shift. There’s a few ways of doing that:-

• Pay travel time as well as time spent with clients – either at the same rate or the NLW – Pay higher rates for time with clients to recompense for typical travel time.
• Pay the same rate throughout the length of the shift regardless of what they’re doing during that timeThere are pros and cons for all the above, but you need to look at: simplicity, overall cost, risk if you lose a few big clients at the same time, and flexibility.

We’ve got a range of template contracts that we’ve honed over the years which give good, fair options for both the employee and employer. (A lawyer told me that gaps over a certain length can count as an unpaid break, but as I’m not a lawyer, I won’t pass that on verbatim.)

Needless to say, the reputational and financial impacts of getting this wrong mean it’s something you can’t ignore in your start-up.

Best wishes, Ben.