Unions are calling on the government to reform "out-of-date and unfair" laws on payments for sleep-in carers after an East Yorkshire carer lost a Supreme Court ruling.
Claire Tomlinson-Blake lost an appeal against a previous ruling that carers are only entitled to the minimum wage when they are required to be awake for work and not while asleep.
Lawyers representing Mrs Tomlinson-Blake argued that "sleep-in" shifts are like being a "night watchman".
Mrs Tomlinson-Blake, who worked in the East Riding of Yorkshire, was paid £22.35 for a sleep-in shift between 10pm and 7am plus one hour's pay at the then-national minimum wage of £6.70, making a total of £29.05.
She challenged the decision at the UK's highest court at a hearing in February last year.
After the ruling Mrs Tomlinson-Blake said the case was not about money but about treating staff fairly.
In the judgment, Lady Arden said a "sleep-in worker who is merely present is treated as not working for the purpose of calculating the hours which are to be taken into account for national minimum wage purposes".
She added that "the fact that he was required to be present during specified hours was insufficient to lead to the conclusion that he was working".
Edel Harris, chief executive of the learning disability charity Mencap - which opposed Mrs Tomlinson-Blake's appeal - said that, if the appeals were allowed, care providers could have faced "devastating unfunded back-pay liabilities" of around £400 million.
The decision prompted calls for the Government to take action, not just in relation to laws covering "sleep-in payments", but also the care sector as a whole.
Unison 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.
"This dire situation was ignored by the Government for years before Covid, and again in the recent budget."
A Government spokesman 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 committed to supporting them.
"We have provided billions of pounds to support adult social care during the pandemic including on infection and prevention control measures, free PPE, priority vaccinations and additional testing."