National Minimum Wage increase - what does it mean for the healthcare sector?

National Minimum Wage increase – what does it mean for the healthcare sector?

With nearly 3 million workers receiving a pay rise of almost 10% this April, Safehands Recruitment has been considering the impact on the healthcare sector.

The increase from £10.42 to £11.44 comes against a backdrop of the cost-of-living crisis, where inflation rose to over 11%. This rise will also now apply to 21- and 22-year-olds, meaning an estimated total of 2.7 million workers are likely to benefit.

We spoke with our Operations Manager Lucy Dowie for more information.

Repeat Visit Programmes are recommencing

“Firstly, it is strongly recommended that healthcare organisations review their National Minimum Wage (NMW) compliance.

HMRC have confirmed they will be commencing their ‘Repeat Visit Programme’ in 2024.

This programme involves them visiting large employers who have either previously been named and shamed for historic non-compliance with the NMW or have been provided with recommendations following a visit. These visits aim to check that the businesses have remained compliant or have made the required changes.

Given that many businesses within the healthcare sector have already been through this process, and many have been ‘named and shamed’ by the Department of Business and Trade, it is advised that they review their compliance as a priority.”

Challenges

“The healthcare sector faces several challenges.

Rotas often record the number of shifts allocated but not the actual hours worked. In addition, unpaid breaks can lead to a challenge if they are not taken or recorded properly. Workers are often asked to carry out additional duties not strictly included within their day-to-day roles where NMW applies. Examples include arriving before the start of the shift, security checks, cleaning up after a shift, and working additional hours, for which time off in lieu is not immediately provided. Some employers want to understand the level of skills and experience possessed by a candidate and request a trial shift. Considerations must be given on the timing of any trial shifts, and where this turns into work, NMW must be paid.

Agencies supplying into this sector are likely to be affected two-fold. In an already underfunded sector, care providers hit with this rise in labour costs may be unable to bear the burden of agency costs, minimising overall agency usage. Some care providers may expect their agency suppliers to take the hit of the rise which will impact heavily on margins if employers are unwilling or unable to change rates.

Reduced margins and overall profitability put a strain on any agency supplier, especially those facing the already hefty costs incurred in attracting, screening and training healthcare workers. Meeting the compliance criteria to supply suitably vetted and experienced healthcare professionals is an essential part of the healthcare agency worker recruitment process. The costs incurred by agencies to ensure all temporary workers receive the training required by healthcare providers before they are allowed on their first shift are considerable, and shrinking revenues may result in less well-resourced agency suppliers cutting corners.”

Navigating compliance

“Navigating NMW compliance is a crucial responsibility for all employers in today’s landscape.

The risks and consequences of non-compliance have become increasingly apparent, with financial penalties and reputational damage looming over businesses. Agencies and end hirers need to work in partnership to ensure a smooth transition to NMW which minimises disruption to the supply of staff. This is especially critical in a care environment where the provision of quality care to the service user should be a shared end goal for all parties.”

Get in touch

For more information, contact our Operations Manager Lucy Dowie on 01242 505415.

Find more information on the National Minimum Wage here.