Minimum wage non-compliance has been increasing since 2016, LPC says
The number of workers who are paid below the statutory minimum increased again last year, following a trend of rising non-compliance with the law that has been ongoing since 2016.
This is according to the latest report from the Low Pay Commission (LPC), which found that 439,000 people received illegally low wages in April 2018, a 2% rise on the year before.
Most of those paid below the minimum rates were aged 25 and over, women were more likely than men to be underpaid, and both the youngest and oldest demographics were at higher risk of being illegally deprived of wages.
Hospitality, retail, cleaning, maintenance and childcare sectors were particularly rife with law-avoiding employers.
LPC Chair, Bryan Sanderson, said: “Our analysis reveals that a worrying number of people are being paid less than the minimum wage … 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 LPC recommended that the government funnel resources into the enforcement of employment law, including in funding for the HMRC and communication to employers, workers and trade unions regarding workers’ entitlements.
At the Institute of Employment Rights, we warn that these actions are not enough to ensure employers follow the law. The problem of poor enforcement stretches more widely across all employment issues, and is compounded by weak penalties at tribunal.
In our Manifesto for Labour Law, we recommend the introduction of an independent Labour Inspectorate to both proactively and reactively detect breaches to the law; stronger rights for trade union to protect their members; ensuring tribunal awards properly compensate workers for their losses; giving stronger enforcement powers to the Labour Courts; and identifying areas of employment law – such as corporate manslaughter and blacklisting – that should attract criminal penalties.
