The government is under pressure to reform care laws after the supreme court ruled that support workers on “sleep-in” shifts are not required to be paid the national minimum wage for hours when they are not awake.. The decision ends a four-year legal battle involving two care workers and the learning disability charity Mencap that threatened to leave care providers with a potential £400m back-pay bill potentially jeopardising the care of vulnerable people. The court said care workers should only be paid the national minimum wage hourly rate on sleep-in shifts when they were awake for the purposes of working. While it ends the immediate possibility that huge back-pay bills would force care providers to close, the decision means thousands of care support workers – already on low incomes – potentially face substantial cuts in earnings. Since the original court ruling in 2017, many sleep-in care workers have been paid at an hourly rate rather than a flat rate, in effect doubling the cost of a shift to about £70. The supreme court ruling has led to speculation that some providers will revert to the £35 flat rate. One sleep-in care support worker working with highly vulnerable disabled clients said he would lose about £160 a month if his employers reverted to the old rates. “We are really panicking. People have mortgages to pay and children to feed. The impact would be massive.” The ruling was welcomed by Mencap, which said it would continue to pay its staff at the enhanced hourly rate. It urged the government to change the law on sleep-in payments, and councils to continue to cover the cost of enhanced rates in contracts. Edel Harris, Mencap’s chief executive, said: “Mencap contested this case because of the devastating unfunded back-pay liabilities facing providers across the sector. This was estimated at £400m. Sleep-ins are a statutory care service which should be funded by local authorities, and ultimately government. “It is no exaggeration to say that if the ruling had been different, it would have severely impacted on a sector which is already underfunded and stretched to breaking point. Some providers would have gone bust, and ultimately the people who rely on care would have suffered.” A spokesperson for the prime minister said: “We are aware of the judgment from the supreme court. Care workers perform a vital role and they have worked tirelessly throughout the pandemic to support our most vulnerable and we are absolutely committed to supporting them.” Unison called the ruling “a huge blow” for thousands of care workers. The union’s general secretary, Christina McAnea, said: “No one is a winner from today’s judgment. Everyone loses until the government intervenes to mend a broken system that relies on paying skilled staff a pittance.” Clare Tomlinson-Blake, one of the care workers who brought the case, said: “This case was never about the money. ​It was about the principle of treating staff fairly. Sleep-in shifts aren’t about just being on call – it’s work. Staff are constantly on guard to protect the most vulnerable in society.” Dr Rhidian Hughes, the chief executive of the Voluntary Organisations Disability Group, said while the judgment provided some welcome clarity, there was still significant uncertainty. “We are concerned of potential kneejerk reactions of local authority commissioners up and down the country which could see funding reduced, and therefore the pay of staff affected.” Before 2017, care workers on sleep-ins were paid a flat rate, receiving an hourly rate only for the hours they were awake for the purposes of working. This changed after guidance said care workers should be paid the national minimum wage for all the hours they were at work, regardless of whether they were asleep. An employment tribunal confirmed this in 2017, in effect doubling the cost of a sleep-in shift to £70. It also said providers should be liable for six years of back-pay to carers, leading to fears that care providers would be bankrupted. A year later the appeal court reversed the back-pay decision and ruled flat-rate payments were fair, meaning sleep-in care workers could receive the full rate only for those hours during which they were awake and assisting the client.