The largest ever legal claim against the care sector has been launched in what could turn out to be one of the worst breaches of pay rules ever seen.

Seventeen care workers claim to have been paid less than half the minimum wage by contractor Sevacare.

Payslips from the six years leading up to 2016 appear to show Sevacare were paying some staff in the north London borough of Haringey £3.27 an hour – less than half the minimum wage, according to the BBC. The company says that is not correct and that it pays its workers an average hourly rate that exceeds the minimum wage.

Alistair Burt MP, who was the care minister until July this year, told BBC Radio 4’s Today programme he welcomed the scrutiny on workers’ conditions as a result of the tribunal. He said if a ruling in favour of the workers “means a massive increase in costs all round, then that’s what’s required”.

In one of her first moves as prime minister, Theresa May downgraded the responsibilities of the minister for care. The responsibilities are now the remit of a parliamentary under-secretary.

Burt said that when he was in office, he worked hard to improve mental health care and adult social care: “There is a sort of tolerance for standards [in these areas] that would not be acceptable in acute hospitals,” he said. “We were making an effort to change this [when I was in office] but we should all be worried about this because as a society more broadly we have not got the cost of mental health care and adult social care really sorted out.”

An employment tribunal will now examine whether Sevacare is correct to claim it pays above minimum wage despite workers’ saying hours the company deems to be off-duty should also be covered. The company has contracts with a number of local authorities across England, providing care and support to 9,600 people each week, but no longer has a contract with Haringey.

According to the union Unison, which is supporting the claim by the 16 women and one man, the £3.27 rate was paid to staff who acted as “live-in” care workers at the time the national minimum wage was £6.70 an hour.

The carers also say they were on duty 24 hours a day, citing an example of one care worker staying for seven days at a time in the home of an elderly woman with severe dementia, sleeping in her room and frequently attending to her needs through the night.

One carer likened the experience to being “in prison”, saying they were effectively not allowed to leave the house all week.

All of the care workers were on zero-hours contracts and Unison says they felt they could not turn down work because they feared being penalised by the company. “We were working like slaves,’ said Florence Wambulu, one of the care workers. “They have to treat us like human beings, not just someone who is there to make money for them.”

Sevacare disputes that the workers had been working 24 hours a day. It told the BBC that the “live-in” care workers’ hours were covered by a “daily average agreement” which saw them paid for 10 hours. The care workers were actually receiving £550 for a seven-day week, it says, which is the equivalent of £7.85 an hour.

“Sevacare submits that it pays, and had paid to these staff, an average hourly rate that is at least the national minimum wage over any pay reference period,” the company added.

The tribunal also involves former Sevacare staff in Haringey who claim their pay rates fell below the minimum wage because they were not paid for travelling between visits to clients.

Haringey council, which was responsible for commissioning the care, is also being sued at the Central London Employment Tribunal for allegedly failing to ensure the workers were paid properly. The council says it ended its relationship with Sevacare in April this year after previously raising “serious concerns” with the Care Quality Commission.

However, the BBC has seen payslips that suggest some care workers currently working in the borough are still not being paid the legal minimum. The hourly rate printed on recent pay documents is well below the national living wage of £7.20 an hour, which came into effect in April and raised the minimum wage from £6.70 hour for employees over the age of 25.

A spokesman for Haringey said the council contractually requires providers to obey minimum wage law, including remuneration for travel time. “Our rates allow for providers to pay both the national minimum wage and the national living wage, and we will be writing to them all to remind them of their Care Act obligations, stating clearly that no breaches will be tolerated,” he said.

The Resolution Foundation thinktank estimated last year that 160,000 care workers in England and Wales were not being paid the national living wage. And last year Her Majesty’s Revenue and Customs announced it would investigate whether the big six care providers were paying people the minimum wage.