18 February 2020 - Article
News broke over the weekend of a couple who have advertised for a live in 'granny sitter' to help them care for an elderly relative. This looks like a very caring and ideal solution to looking after a relative at home rather than paying for residential care. However, anyone thinking of taking this approach will need to be careful to avoid legal pitfalls. Here are six points to consider when employing workers in a home setting. Understand their employment rights It is likely that any live in carer would be a 'worker' if not an employee. As such, they will have certain employment rights including:
- entitlement to be paid the national minimum wage (unless the exemption for family workers applies — this is where an individual is treated as part of the employer's family and does not pay for food or accommodation but shares in family life and leisure activities);
- statutory paid holiday, as well as regular rest breaks; and
- there may be an obligation to 'auto-enrol' individuals into a pension scheme and make contributions on the individual's behalf.
Ensure they're paid the national minimum wage If accommodation is offered rent free then only a small amount can be set off against the obligation to pay the national minimum wage — currently £6 per day. It is not possible to pay the individual and then to collect 'rent' from them — the individual will need to receive the national minimum wage (less the offset) in addition to any free accommodation offered. Understand the tax position on any accommodation provided If the accommodation is 'essential' or if the individual is required by the employer to occupy the property for the better performance of the role, then the arrangement may be a genuine service occupancy. If not, income tax and/or NICs may be due on the value of the benefit in kind (and possibly in certain cases, SDLT may be payable). This would pose practical funding problems if the individual was not in fact being rewarded in money (or if any amount of money paid were less than the amount of tax properly payable in respect of the value of benefits in kind). Carry out your duties as an employer The employers will need to set up a payroll account with HMRC to process payments, including paying employer NICs (if applicable). Other compulsory steps such as securing employer's liability insurance will also be necessary, and the employers may need to notify and, where applicable, get consent from other interested parties such as home insurers, mortgagors or lessors. Ensure Health and Safety isn't an afterthought Health and safety is always an important consideration, and with caring roles it will be necessary to carry out a risk assessment and implement training and other measures where appropriate, including in relation to safeguarding. Document and keep records Arrangements should be documented and clear — particularly in relation to what happens to the accommodation if the role is terminated for any reason. Appropriate records should be kept, in particular in relation to working hours.