Care workers
Care workers can face some challenges in the tax and benefit system, often due to their contractual arrangements and travel patterns. In these pages, we set out some of the issues related to zero hours contracts and varying work patterns and explain what to do if you are affected by them.
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Zero hours contracts
Zero hours contracts occur when a person agrees to be available for work when required but has no guaranteed hours or times of work. Their use for care workers helps the home care providers manage high and low demand.
If you are on a zero hours contract, you will usually have the employment status of ‘worker’, or otherwise employee. Worker status is explained in our guidance and on GOV.UK. Having at least worker status means that, in theory, you should be entitled to the minimum set of statutory employment rights, such as the minimum wage, holiday pay, a workplace pension, rest breaks and protection from discrimination.
Further, being paid under the Pay As You Earn (PAYE) system (as most care workers are) provides a ‘secondary contributor’ (that is, someone who is liable to pay class 1 secondary National Insurance contributions). This means that you may be able to receive statutory sick pay (SSP) and parental pay from your employer if you satisfy all relevant qualifying conditions.
For information on zero hours contracts and statutory sick pay, see our statutory sick pay page.
In response to concerns about the use of zero hours contracts, the government issued some guidance to employers. Although this is aimed at employers, it may be useful for workers too to help them understand their rights.
If you have any concerns about being on a zero hours contract, you could contact ACAS which has a free, confidential helpline to ask for advice on what to do next.
Holiday pay
All care workers who are classified as employees or workers are entitled to holiday pay.
The minimum holiday entitlement under law is 5.6 weeks per year – this equates to 28 days for a person working a five-day week.
One method of calculating paid leave for those working irregular hours throughout the year, such as zero hours contract workers, is to base entitlement on 12.07% of the hours worked.
For more information on how holiday pay is calculated in different scenarios, see our main page on Holiday pay.
If you are unsure as to whether your employer is dealing with your holiday correctly in your particular circumstances, you could seek further clarification as to your position from ACAS.
Other issues
Domiciliary care workers are sometimes paid by reference to 'contact time only’, perhaps with a small mileage allowance on top, even though they can spend a lot of time driving around.
Care workers can therefore have fluctuating earnings, which can cause complexities with things like auto enrolment. We explain how auto enrolment applies to fluctuating earnings in our guidance on pension contributions under auto-enrolment. If you are on a low income, we also look at the effect of pension contributions on state benefits, like tax credits and universal credit.
If care workers are not earning enough to pay National Insurance contributions (NIC), there may also be concerns over gaps in contribution records. For information on NIC and different ways gaps can be filled, see our pages on National Insurance generally, NIC for employees and National Insurance credits.
Many domiciliary care workers are not paid for their travel time or all their costs. We look at some considerations to do with minimum wage, tax and benefits on our dedicated page, which includes helpful ‘real-world’ worked examples.
