More than 250,000 workers in the UK are being cheated out of the legal national minimum wage by unscrupulous employers, a damning new report reveals.
A new report from the Trade Union Congress (TUC), National Minimum Wage – Keeping up the Pressure, reveals that while the majority of employers are ‘happy’ to pay up, others are finding new ways to escape paying the legal minimum wage.
The findings may prove to be deeply embarrassing for the Tory-led coalition government, who claim to be “making work pay” and on the side of “hardworking people”.
The national minimum wage rate is currently set at £6.50 per hour for workers over the age of 21, falling to £5.13 for 18-20 year olds, £3.79 for under 18’s and £2.73 per hour for apprentices.
However, the TUC says a minority of employers are adopting a ‘wide range of scams’ to avoid paying up: including 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.
Apprentices are particularly likely to be underpaid, with figures suggesting as many as 120,000 people on apprenticeships are paid less than the legal requirement.
TUC says enforcement of the national minimum wage needs to ‘continuously improved’ and stronger punishments for employers who flout the law need to introduced, such as increasing the maximum fine from £5,000 to £75,000.
The report also calls for the appointment of 100 more HM Revenue and Customs (HMRC) enforcement officers, the naming and shaming of employers who fail to pay at least the national minimum wage and better guidance for businesses.
The TUC has outlined a 10-point programme the next government should adopt to improve minimum wage enforcement:
- Restore the budget for raising awareness about the minimum wage to £1 million.
- Hire 100 more HM Revenue and Customs (HMRC) enforcement officers
- Better official guidance on the minimum wage so that employers know their responsibilities.
- Create legal gateways so that HMRC can share information about enforcement with local authorities and the transport regulatory authorities
- Name and shame all non-payers.
- Government to guarantee arrears if employer goes bankrupt or simply vanishes.
- Adopt a prosecution strategy targeted towards the worst offenders and increase maximum fine from £5,000 to £75,000.
- More targeted enforcement for high-risk sectors.
- Make government funding for training apprentices dependent on employers paying the minimum wage, and create a duty for training providers to check that the minimum wage is paid.
- Promote collective bargaining so that trade unions can deal with more minimum wage problems themselves.
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.”