Employers evading minimum wage regulations

8 January 2015

The TUC has highlighted employer scams to avoid payment of the national minimum wage.

To counteract improvements to enforcement, new ways of evading the minimum wage have emerged, according research published by the TUC; Enforcing the National Minimum Wage – Keeping up the Pressure.

The methods adopted by some employers include under-recording hours, bogus self-employment, misusing interns and volunteers, charging for uniforms, not paying for travel between work sites during the working day, clocking workers off when there are no customers in the store or cafe, and employers vanishing to avoid minimum wage fines only to reappear under another name.

Those most at risk, according to the TUC are apprentices, migrant workers, domestic workers, interns and bogus volunteers, false self-employment, zero-hours contracts including temporary agency workers, social care, workers whose accommodation is dependent on their job, seafarers, and umbrella employment schemes.

The report estimates that the minimum wage, which increased from £6.31 an hour to £6.50 for adults last October, is not being paid to at least 250,000 workers. This figure is a conservative estimate based on the Office for National Statistics (ONS) official low pay estimate plus an estimate of the number of low paid workers in the informal economy.

TUC General Secretary Frances O’Grady said: “Failing to pay the minimum wage is an antisocial act that squeezes those workers who have the least. There should be no hiding place for cheapskate bosses who try to cheat their workers out of the minimum wage.

“We must engage in a constant battle to ensure that every worker gets at least the minimum. It is clear that some employers are actively looking for new ways not to pay even the legal minimum.

“There should be a broad consensus between political parties, good employers and trade unions that the minimum wage must always be enforced effectively. We urge everyone to support the TUC’s plan for ensuring continuous improvement to the minimum wage system.”

The TUC have produced a 10 point programme for better wage enforcement, read it here. It highlights the need for collective bargaining in dealing with minimum wage issues. To find out more about collective bargaining, the IER’s Reconstruction After the Crisis: A Manifesto for Collective Bargaining is available for purchase.