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”.
> I doubt they are capable of feeling embarrasment or shame…
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.”
Source – Welfare Weekly, 08 Jan 2015
Highly controversial Zero hours contracts are forcing Scottish workers to turn to food banks and payday lenders, according to a new report from Citizens Advice Scotland (CAS).
The report, ‘Working at the Edge‘, found that the inappropriate use of zero hours contracts by unscrupulous employers is exploiting workers and leaving them with “no hours, no pay and no chance”.
Some employers are now using zero hours for the majority of their staff, the report says, with women representing over half of those workers trapped on the controversial contracts. Young people and pensioners are also greatly affected.
Workers are frequently denied equal and fair working rights routinely awarded to part-time and full-time staff. The report warns that some employers are using zero-hours as a tool to easily sack staff.
CAS also warns that the misuse of zero hours by some employers is leading to some workers facing bankruptcy and prosecution over unpaid debts.
The report includes a case study of a CAS client on zero hours who only had three days work in a month and was forced to turn to a food bank to feed themselves. The client received a court summons after they found themselves £1,000 into arrears as a direct result of not being given enough hours work to pay debts.
Another case tells the story of a waitress on zero hours who was facing possible bankruptcy, after stacking up a debt of nearly £5,000 to payday lenders, while they waited for their employer to give them more hours work.
CAS policy manager Keith Dryburgh said:
“Zero hours contracts (ZHCs) are meant to provide flexibility for employers and workers alike. They are not suitable for everyone, but they can be a useful option for some people — as long as the system is applied fairly.
“However, we see growing evidence that the system is in fact being abused by some employers, who are frankly misusing it to exploit their workers.
“It seems that the flexibility in the system often lies with the employer, not with the worker. And too often workers are left with no hours, no pay, no security and no chance.
“There are 1.4 million people on ZHCs across the UK. They tend to be aged under 25 or over 65. Over half of them are women, and the areas they work in are those like catering, tourism, food and care.
“In highlighting these cases we hope to persuade employers that they should do right by their staff, and also to open a dialogue with government about how to improve the system to make sure this kind of exploitation doesn’t occur.
“We make a number of recommendations in the report, and we want to engage with ministers, unions and others to discuss ways to ensure a fair deal for all workers.
“We also want to get the message to any worker who is on a zero hours contract. You have rights, and we can help you to stand up for them.
“If you are unhappy with your contract or unsure of your rights, contact your local CAB and we will help you with free confidential advice.
“Nobody in 2014 should be in a position where they are working but don’t have the security of an actual income.”
The Scottish Government has previously called on the UK Government to crack down on the use of inappropriate zero hours contracts, by ensuring that workers receive compensation if shifts are cancelled at short notice.
Commenting on the report from Citizens Advice Scotland, SNP MSP Linda Fabiani said:
“While the UK government is encouraging the use of zero hours contracts, the Scottish Government has been looking at options available to tackle the issue within its current limited powers.
“As employment policy is reserved to Westminster, this is yet another example of how we can do things differently, and better, with independence.
“Zero hours contracts can be beneficial for some but they are not appropriate for everyone – and are more likely to be offered to women, young people and pensioners. And the growth in the inappropriate use of these contracts is clearly cause for real concern.
“The fact that anyone is forced to rely on food banks in a wealthy country like Scotland is nothing less than a scandal – but that people in employment are now struggling to afford the basics like food is simply unbelievable.
“After a Yes vote we can use the powers of independence to make sure that more people feel the benefits of Scotland’s wealth.
“The establishment of a Fair Work Commission and a commitment to raise the minimum wage at least in line with inflation will help us take action on low pay.”
Source – Welfare News Service, 23 July 2014
Hello Mr Pot…have you met Mr Kettle ?
(not satire – it’s the Tories!)
Here’s what Mark Harper – the Tory immigration minister who has just resigned for employing an illegal immigrant as a cleaner – said in parliament just last Novemberabout ‘unscrupulous’ employers who employ illegal immigrants:
“There is some agreement about the need to crack down on unscrupulousemployers. One is their exploitation of individuals in the United Kingdom; another is that by treating individuals in the way they do they undercut legitimate employers who obey the law and follow the rules. That iswrong. Unscrupulous employers also help to facilitate one type of illegal migration, in which individuals are, frankly, duped into coming to the United Kingdom with the promise of a better life only to end up working in unsatisfactory conditions and not receiving a good income, and so would have been better off if they had never made the…
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