There is a concern that, if the situation continues, social mobility may go backwardsResearch by the independent Low Pay Commission (LPC) revealed that in April 2018 around 439,000 employees received smaller amounts than the hourly minimum wage.
The report – titled ‘Non-compliance and enforcement of the national minimum wage: April 2019’ – employed up-to-date government and stakeholder evidence. Research documents such as the ‘Labour Force Survey (LFS)’ and ‘Annual Survey of Hours and Earnings (ASHE)’ were consulted.
The report discovered that in April 2018 among underpaid employees, 369,000 workers aged 25 or over did not receive the national living wage; the rate of this was £7.83 per hour between 1 April 2018 and 31 March 2019, and it has now gone up to £8.21 per hour as from 1 April 2019.
In April 2018, about 30,000 more workers received less than the national living wage when compared against the preceding year; 23 per cent of eligible workers receive wages either at or below this rate. Previously by comparison, 135,000 employees received less than £7.20 an hour – the living wage amount introduced in 2016.
The Chair at the LPC, Bryan Sanderson, commented that recent celebrations were held for 20 years of the minimum wage: the institution has improved pay for millions of workers. He also said that it is important that people receive their entitlement, remarking that businesses need to operate a level playing field and not illegally undercut wages.
He said that the government has done a great job of enforcing the minimum wage, but steps need to be taken to ensure that employers comply from the outset and that workers can enforce their rights.
In addition, the LPC discovered that females are more likely to receive less than the minimum wage when compared with men, and that the vulnerable oldest and youngest employees also risk underpayment. The largest number of underpaid employees hail from the retail, hospitality, maintenance and cleaning sectors, while the occupation of childcare has the greatest proportion of individuals who are underpaid.
The report comments that the enforcing of the minimum wage – as undertaken by HM Revenue and Customs (HMRC) – has received improved funding, which has resulted in a record number of people being classified as underpaid, with fines being levied on employers and arrears being repaid in 2017 to 2018.
The LPC, which comprises employers, experts and trade unions, suggests that the government should carry on backing communications targeting both employers and employees about minimum wage enforcement and compliance. The report supplies guidance, specific recommendations and information for trade unions and employees. Among LPC recommendations are that the government take all available chances to improve the measuring of underpayment and look into new methodologies to assess the rate of non-compliance.
The General Secretary at the Trades Union Congress (TUC), Frances O’Grady, said that every worker deserves fair pay for their efforts. The minimum wage must be enforced everywhere, she said, and bad employers must not be able to hide. She also commented that the naming and shaming of bosses who cheat staff out of pay should continue.
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