Social Care Fair Pay Agreement: What care providers need to know
The Employment Rights Bill introduces the new concept of Fair Pay Agreements (FPAs) in the social care sector which are set to reshape terms and conditions for the care workforce.
What are fair pay agreements?
FPAs are a new form of sector-wide collective bargaining. They aim to set legally binding minimum standards for pay and conditions across the adult social care sector. This is a response to long-standing concerns about low wages, staff shortages, and high turnover rates.
A Social Care Negotiating Body comprising representatives for care providers (most likely care association leaders) and workers (trade union leaders) will be set up to negotiate these agreements. Once agreed, the terms will be legally enforceable across the sector.
What will FPAs cover?
The full details are subject to consultation, which is launching in the Autumn, but FPAs are expected to include:
Minimum pay rates above the National Minimum/Living Wage
Pay arrangements such as pay bandings and payment for travel time in homecare
Training and development entitlements
Other employment terms such as sick pay and holiday entitlement
These standards will apply across public, private, and voluntary sector providers delivering regulated care services.
What does this mean for care providers?
You may need to increase current wages and improve terms and conditions to meet the new minimum standards. This could remove your competitive advantage if you currently pay more than competitors to recruit and retain employees and don’t have the financial means to further increase pay rates. It may also further erode pay differentials for more senior roles, which may not be funded as part of the FPA.
Improved pay and conditions could help with recruitment and retention, which is welcomed, particularly in light of recent announcements to stop overseas recruitment. But will they be enough to compete with NHS terms and conditions or the deep pockets of the supermarkets?
The critical question is how is the FPA going to be funded? Without significant further resources from central Government, which isn’t diverted elsewhere by local authorities, the FPA has no prospect of success.
Compliance and enforcement
Once FPAs are in place, failure to comply could lead to enforcement action in a similar way to how the National Minimum Wage is currently enforced, although enforcement will be carried out by the newly created Fair Work Agency.
Timeline for Implementation
The Government has outlined a phased approach:
Autumn 2025: Launch of consultation
Early 2026: Establishment of the Fair Work Agency to oversee implementation
October 2026: Launch of the Social Care Negotiating Body
2027: Rollout of Fair Pay Agreements
Our view
Fair Pay Agreements represent a major shift in how employment standards are set in social care but could be a positive development for the sector and help boost recruitment and retention if, and only if, they are properly funded.
The Health & Social Care team at RWK Goodman is a recognised market leader, with in-depth knowledge and experience in the social care sector. Based across London, Thames Valley and the South West, our team of lawyers are fully immersed in social care, which enables us to cut to the heart of urgent matters quickly, and help you plan for what may lie ahead.
Our aim is to get to know your business and become the strategic advisors you trust to provide insightful, pragmatic solutions. Our clients include nursing and residential homes, hospices, homecare agencies, supported living, specialist colleges and children’s services and our advice covers many areas.