Minimum Wage Cheating Is On The Rise

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30 April 2019

A new report from the Low Pay Commission has found that the number of people paid less than the statutory minimum wage in the UK increased in 2018. The largest numbers of underpaid individuals work in hospitality, retail and cleaning and maintenance.

Taking a benchmark in April 2018 439,000 people were paid less than the hourly minimum wage they are entitled to. Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW). This is an increase of around 30,000 on the previous year’s level of underpayment of the NLW, or a 2 percentage point rise in the share of workers entitled to the rate.

135,000 people were paid below £7.20 per hour (the 2016 introductory NLW rate).

LPC Chair Bryan Sanderson said: "Our analysis reveals that a worrying number of people are being paid less than the minimum wage. We recently celebrated 20 years of the minimum wage – it has raised pay for millions of workers, but it is essential that people receive what they are entitled to. It is also vital for businesses to be able to operate on a level playing field and not be illegally undercut on wages.

"The Government has made real progress with its enforcement of the minimum wage but more needs to be done to ensure employers comply in the first place and workers know how to enforce their rights."

Women victims

Women are more likely than men to be paid less than the minimum wage. Underpayment is also higher for the youngest and oldest workers. The largest numbers of underpaid individuals work in hospitality, retail and cleaning and maintenance. Childcare is the occupation with the highest proportion of underpaid workers.

Fines and arrears

Enforcement of the minimum wage by HM Revenue and Customs has benefited from increased funding, with a record number of workers identified as underpaid, arrears repaid, and fines levied on non-compliant employers in 2017/18. But other important measures – for example, the numbers of cases opened and closed – stood still and the overall figures were driven by a relatively small number of cases.

Communication

The LPC has called on government to continue to invest strongly in communications to both workers and employers around minimum wage compliance and enforcement.

Commenting on the publication of the Low Pay Commission's report, TUC General Secretary Frances O’Grady said: “Every worker deserves fair pay for their work. There can be no exceptions to the minimum wage.

"And there should be no hiding place for bad employers - that’s why the government must restart naming and shaming bad bosses who cheat their workers out of pay."

Picture: The Low Pay Commission has found minimum wage cheating is on the rise.

Article written by Brian Shillibeer | Published 30 April 2019

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