Care providers are among almost 500 employers who have been fined a total of £10.2m for failing to pay staff the national minimum wage (NMW) or national living wage (NLW), the government announced today.
The enforcement has resulted in £6m being given to staff who were underpaid by their employers.
The government has published the names of the 491 employers concerned, with 23 appearing to work in the social care sector, mainly providing domiciliary services.
The news follows the latest rise in the NLW, the minimum rate for those aged 21 and over, which went up from £11.44 to £12.21 an hour in April 2025.
Average care worker pay
As of March 2025, the median pay for a care worker in the independent sector in England was £12 an hour, with an estimated 23% paid the then NLW or up to 10p more than this at the time, according to Skills for Care's annual report on the workforce, published this week.In response to today's news, the Homecare Association said it strong supported enforcement of the NMW and NLW.
"Care workers perform demanding, skilled work and deserve every penny they earn," said chief executive Jane Townson, in a post on LinkedIn. "Employers who fail to pay correctly undermine their staff and compliant providers."
Councils 'underpaying for care due to lack of government funding
However, she warned that, due to "chronic government underfunding of social care" a third of councils were paying providers less than £22.71 per hour, the minimum that the association has calculated was necessary to meet the direct employment costs of having a care worker on the NLW.It has further calculated that there was a £1.6bn gap between council home care fees and the minimum price required by providers in England to operate sustainably, including by paying staff the NLW.
Townson said this needed to be addressed through increased government investment and a national contract for care services, setting minimum fee rates that commissioners would have to meet and that would enable providers to comply with the NMW/NLW, other employment rights provisions and care regulations.
But she warned that commissioners and providers were also responsible for the underpayment of staff.
"Commissioning at below-cost rates creates the conditions for unsafe care and labour exploitation. But providers also bear responsibility. Below-cost commissioning does not excuse non-compliance. If you cannot pay legal wages at the rates offered, you should not accept the contract."
£500m for fair pay agreement dismissed as inadequate
The news comes with the government's Employment Rights Bill set to establish an Adult Social Care Negotiating Body, which will set terms and conditions for sector staff through annual "fair pay agreements", the first of which is due to be settled in 2028-29.The government has allocated £500m to councils to implement this agreement, but the sume has been criticised as highly inadequate by sector leaders.
The fair pay agreements will be enforced through a new Fair Work Agency, set up under the bill, that will also take over responsibility for ensuring compliance with the NWM and NLW and other employment rights, including through new powers to enforce holiday and sick pay provisions. It is due to go live in April 2026.
