National Minimum Wage: Low Pay Commission finds non-compliance ongoing
A government body, the Low Pay Commission, has recently published a report on ‘Non-compliance and enforcement of the National Minimum Wage’. Using up -to-date statistics for April 2018 they have found 439,000 people were paid less than the hourly minimum wage to which they are entitled. Of these, 369,000 were workers aged 25 and over. This is an increase of around 30,000 on the previous year’s level of underpayment of the NLW. In addition, 135,000 people were paid below £7.20 per hour (the introductory NLW rate when it was brought in in 2016). Whilst they caveat these estimates they report that these findings are consistent with a trend of increasing underpayment since the introduction of the NLW in 2016.
The largest numbers of underpaid individuals work in hospitality, retail and cleaning and maintenance; but childcare continues to be the occupation with the highest proportion of underpaid workers. A third of all underpaid workers are based outside of the commonly accepted low-paying occupations.
Enforcement of the NMW is carried out by HMRC. The Low Pay Commission recommends strong government investment in communications to both workers and employers around minimum wage compliance and enforcement. However, confidence needs building by the government in the complaints process and work needs to be done with trade unions, ACAS, and other bodies. It also highlights the need for the government to invest in getting the guidance to employers right, which will help to simplify the issue longer term.
Published: 16 May 2019
Article Sections: Payments during Employment