Employment Law for Care Employers: What You Need to Know

Running a care business in the UK means operating in one of the most heavily regulated employment environments in the country. Between CQC oversight, National Minimum Wage complexities around sleep-in shifts, high staff turnover, and a workforce that relies heavily on zero hours contracts, the compliance burden is significant. Get it wrong and the consequences range from CQC enforcement action to six-figure HMRC back-pay orders.

This guide covers the employment law issues that matter most to care home operators and domiciliary care providers. Written for care home owners, registered managers, and HR leads. Plain English, employer-focused, and updated for the Employment Rights Act 2025 changes taking effect from April 2026.

Last updated: April 2026

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Employment Law in the Care Sector UK: Why It Is Different

The care sector sits at the intersection of employment law, health and safety regulation, and sector-specific oversight from the Care Quality Commission. That creates compliance requirements you will not find in most other industries.

• CQC registration and staffing requirements. The CQC's Regulation 18 (Staffing) requires providers to deploy enough suitably qualified staff to meet residents' needs. Understaffing is not just an operational problem. It is a regulatory breach. This creates direct tension with zero hours contracts, because you cannot simply reduce hours without risking regulatory action.

• Sleep-in shifts and National Minimum Wage. Care is one of the few sectors where workers routinely sleep on-site as part of their duties. Whether those hours count as working time for NMW purposes has been the subject of years of litigation.

• Mandatory pre-employment checks. DBS checks, right to work verification, and professional registration checks are legal requirements that carry criminal penalties if breached.

• 24/7 operations. Care homes run around the clock. That means shift patterns, rest breaks, Bank Holiday pay, and working time calculations are more complex than in standard businesses.

• High turnover. Skills for Care reports care worker turnover at around 28% annually. Onboarding, training, and exit processes are a constant compliance exercise, not a once-a-year event.

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Sleep-In Shifts and National Minimum Wage: The Current Position

This is the single most financially significant employment law issue in the care sector.

The Royal Mencap Decision

The Supreme Court decision in Royal Mencap Society v Tomlinson-Blake [2021] settled the position: workers on sleep-in shifts are only entitled to the National Minimum Wage for time when they are awake and actually working, not for the entire period they are on the premises.

Before this ruling, the Court of Appeal had found that sleep-in workers were entitled to NMW for the entire shift. Had that position stood, HMRC estimated the back-pay liability across the care sector at over £400 million.

What This Means for Employers Now

• You must pay at least NMW for any time the worker is awake and called upon to work during a sleep-in shift
• You must pay a flat allowance for the sleep-in shift itself (this can be below NMW per hour, provided the worker is genuinely sleeping)
• You must keep accurate records of when workers are called upon to work during sleep-in shifts
• If your sleep-in workers are routinely woken and required to work for significant portions of the night, the Mencap defence weakens considerably. HMRC can argue these are not genuine sleep-in shifts

Practical Compliance Steps

1. Audit your sleep-in arrangements. Are workers genuinely sleeping for most of the shift? If disturbances are frequent, you may need to reclassify these as waking night shifts and pay NMW for the full period.
2. Keep detailed records. Log every disturbance: time, duration, reason. This is your evidence if HMRC investigates.
3. Review your flat-rate allowances. Many providers pay between £40 and £60 per sleep-in shift.
4. Check your contracts. The contract should clearly distinguish between sleep-in shifts and waking night shifts.

For a detailed guide on NMW obligations, see our National Living Wage 2026 guide.

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Zero Hours Contracts in Care: Current Rules and Incoming Changes

The care sector is one of the largest users of zero hours contracts in the UK. Skills for Care data shows approximately 24% of the adult social care workforce is on zero hours terms, significantly above the national average.

Why Care Uses Zero Hours Contracts

The reasons are structural. Domiciliary care rotas change weekly based on client needs. Residential care needs bank staff to cover sickness and holidays. Workers themselves often prefer flexibility, particularly those working across multiple providers. And the funding model (local authority commissioning) often does not guarantee consistent hours.

ERA 2025: The Right to Guaranteed Hours

The Employment Rights Act 2025 introduces the right to request guaranteed hours, expected to come into force in autumn 2026. This will hit the care sector harder than almost any other industry.

Under the new rules:

• Workers on zero hours or low hours contracts will be able to request a contract reflecting their regular working pattern
• Employers will need to offer guaranteed hours based on a reference period (expected to be 12 weeks)
• Refusal will need to be justified on specific statutory grounds
• There will be a right not to suffer detriment for making a request

What care employers should do now:

• Audit your zero hours workforce. How many workers have effectively regular hours?
• Model the financial impact if 50% of your zero hours workers request guaranteed hours
• Start engaging with the changes now rather than waiting for the final regulations

For a full breakdown, see our zero hours contracts employer guide.

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DBS Checks: Legal Requirements for Care Employers

All care providers must obtain Disclosure and Barring Service checks for staff in regulated activity with vulnerable adults or children. This is a legal requirement under the Safeguarding Vulnerable Groups Act 2006.

What Level of Check Is Required?

Enhanced DBS with barred list check is the standard for care workers in regulated activity. It reveals spent and unspent convictions, cautions, reprimands, warnings, and information held on the DBS barred lists. Whether you need the adults' barred list, children's barred list, or both depends on your service user group.

Key Compliance Points

• It is a criminal offence to knowingly employ a barred person in regulated activity. The maximum penalty is five years' imprisonment.
• You must check before the person starts work in regulated activity. If the DBS check is delayed, the worker cannot carry out regulated activity until it clears, although they can do non-regulated tasks under supervision.
• Portability. You can accept a DBS check via the Update Service if the worker is registered. Otherwise, you must obtain a new check.
• Ongoing duty to refer. If you dismiss or remove a worker from regulated activity because they harmed or posed a risk to a vulnerable person, you have a legal duty to refer them to the DBS. Failure to refer is a regulatory breach.

The CQC's Regulation 19 (Fit and proper persons employed) requires providers to have recruitment procedures ensuring staff are of good character. CQC inspectors routinely check DBS records, and gaps in compliance are a common cause of regulatory action.

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Right to Work Checks

Care employers have the same right to work obligations as any other UK employer, but the sector's reliance on overseas recruitment makes this an area of heightened risk.

• You must check every worker's right to work before they start employment, following the Home Office prescribed process
• For workers with time-limited permission, you must conduct follow-up checks before their permission expires
• Many care providers now hold a Home Office Sponsor Licence for the Health and Care Worker visa route, which creates additional reporting and record-keeping obligations
• Sponsor licence revocation is a live risk. The Home Office has revoked licences from care providers for non-compliance, leaving sponsored workers without valid immigration status

For more detail, see our right to work checks employer guide.

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Bank Holiday Pay in Care

Bank Holiday pay is a perennial source of confusion in the care sector, because care homes do not close on Bank Holidays.

The Legal Position

There is no statutory right to paid time off on Bank Holidays. The law requires 5.6 weeks of paid annual leave per year (28 days for full-time workers). Bank Holidays can be included in that total or provided on top. The contract must be clear.

Care-Specific Complications

• Shift workers often work Bank Holidays as part of their normal rota. The contract needs to specify enhanced pay, a day in lieu, or neither.
• Zero hours workers accrue holiday based on hours worked. Their Bank Holiday entitlement depends on the accrual calculation method.
• Part-time workers are entitled to a pro-rata equivalent under the Part-Time Workers Regulations 2000. Getting this wrong is a common source of claims.

Many care providers pay Bank Holiday enhancements (typically time and a half) as a recruitment tool, even without a legal requirement. If you do, ensure the contractual terms are clear and applied consistently.

For a detailed breakdown, see our Bank Holiday pay employer guide.

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ERA 2025 Changes: What Matters Most for Care Employers

SSP From Day One (Live from April 2026)

Previously, Statutory Sick Pay only kicked in from the fourth qualifying day. From April 2026, SSP is payable from day one.

For care, this is a significant cost increase. Care workers have higher-than-average sickness absence rates (around 9 days per year compared to a national average of 6). The removal of three waiting days means every short-term absence now triggers an SSP obligation immediately.

What to do: budget for increased SSP costs, review sickness absence policies (many providers used the waiting days as a deterrent against short-term absence), and update contracts and staff handbooks. For full guidance, see our SSP from day one guide.

Day One Unfair Dismissal Rights (Expected 2027)

The removal of the two-year qualifying period for unfair dismissal claims is coming in 2027. For a sector with 28% annual turnover and heavy reliance on probationary periods, this changes the risk profile of every dismissal. The government has indicated a statutory probationary period (expected nine months) with a simplified dismissal process, but the detail is not yet published.

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Managing High Turnover: Compliance at Scale

With turnover at 28%, a care provider with 100 staff processes around 28 onboarding and offboarding cycles per year. Each involves right to work checks, DBS checks, contract issuance, mandatory training, probation management, and exit processes (including potential DBS referral obligations).

The compliance risk is not in any single step. It is in the volume.

• Systemise everything. Use HR software with automated reminders for DBS renewals, right to work follow-ups, and probation reviews.
• Audit quarterly. Do not wait for a CQC inspection to find gaps.
• Centralise records. Whether you operate one home or twenty, all employment compliance records should be in one system.

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Care employers face some of the most complex compliance requirements in the UK. The EmployerKit Audit reviews your contracts and policies against current law. From £49. Visit employerkit.com/tools/employerkit-audit.

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Frequently Asked Questions

Q: Do sleep-in care workers have to be paid National Minimum Wage for the entire shift?

A: No. Following Royal Mencap Society v Tomlinson-Blake [2021], sleep-in workers are only entitled to NMW for time when they are awake and actually working. The rest of the shift can be paid at a flat allowance below NMW. However, if workers are routinely disturbed throughout the night, HMRC may argue it is not a genuine sleep-in and full NMW applies.

Q: Can I still use zero hours contracts for care workers after the ERA 2025 changes?

A: Yes, zero hours contracts remain legal. But from autumn 2026, workers will gain the right to request guaranteed hours based on their regular working pattern over a 12-week reference period. You will need to grant the request or justify refusal on specific statutory grounds.

Q: What happens if I employ someone who is on the DBS barred list?

A: It is a criminal offence under the Safeguarding Vulnerable Groups Act 2006 to knowingly employ a barred person in regulated activity. The maximum penalty is five years' imprisonment. You must immediately remove them from regulated activity and refer the matter to the DBS.

Q: How does SSP from day one affect care providers specifically?

A: Care workers average around 9 sick days per year. Under the old rules, the three waiting days meant short absences cost nothing in SSP. From April 2026, every day of qualifying sickness triggers SSP immediately. For a provider with 100 staff, that could mean hundreds of additional SSP days per year. Review your absence data and tighten your management procedures.

Q: Do I need a Sponsor Licence to recruit overseas care workers?

A: Yes. To employ care workers on the Health and Care Worker visa route, you need a valid Home Office Sponsor Licence. The application takes around eight weeks and carries ongoing reporting obligations. The Home Office actively revokes licences from non-compliant providers.