UK: TUC calls for stronger enforcement of national minimum wage

A 10-point plan to improve the enforcement of the national minimum wage in the UK has been published by the TUC. It estimates that at least 250,000 workers are not being paid the minimum wage, and the new Conservative government, elected in May 2015, has pledged to put this right.

On 8 January 2015, the Trades Union Congress (TUC) published a report, National minimum wage enforcement: Keeping up the pressure – What more needs to be done?, that estimates that at least 250,000 workers are not being paid the national minimum wage, although there are no ‘robust statistics’ on the extent of the problem.

Although most minimum wage employers comply with the law, the TUC argues that some have developed ways of avoiding paying the statutory rates. These include:

• under-recording working hours;
• falsely categorising workers as self-employed, interns or volunteers;
• charging for uniforms, tools, training or travel;
• not paying for travel time between work sites during the working day;
• clocking workers off when there are no customers in a store or café.

The report states that ‘in other cases, employers go bankrupt, sometimes to re-emerge under another name, or simply vanish when they are caught cheating their workers’ (p. 4).

The TUC believes that ‘disreputable employers’ will always find new ways of cheating workers and avoiding paying the minimum wage and that ‘constant vigilance’ is needed to ensure that every worker entitled to the minimum wage actually receives it.

It also argues that measures to enforce the minimum wage must be continuously improved. The report acknowledges improvements made by successive governments, which have included fining guilty employers and, in some cases, ‘naming and shaming’ them.

10-point plan

The TUC argues, nevertheless, that the UK government should do more. It has set out a 10-point plan of measures.

1. Increasing the budget for raising awareness about the minimum wage by GBP 1 million (€1,424,844 as at 30 July 2015), following cuts made under the previous Conservative–Liberal Democrat coalition government.
2. Increasing the enforcement budget and hiring by HM Revenue and Customs (HMRC) of an extra 100 national minimum wage compliance officers.
3. Better official guidelines (than the current poor-quality guidelines) on the minimum wage so that employers know their responsibilities.
4. Information-sharing between HMRC, local authorities and the transport regulatory authorities.
5. An arrears payment guarantee to cover situations where an employer goes bankrupt or disappears (a quarter of minimum wage arrears are not recovered).
6. Naming and shaming of all underpaying employers.
7. More prosecutions of the worst offenders and an increase in the maximum fine from GBP 5,000 (€7,123) to GBP 75,000 (€106,848).
8. Targeting the underpayment of apprentices.
9. Enforcement work that targets the occupations, industries, localities and groups of people most at risk.
10. Promotion of collective bargaining so that potential minimum wage problems can be ‘prevented at source’ by trade unions.

Targeting vulnerable groups

The report identifies groups of workers who are particularly at risk of underpayment, including: apprentices; migrant workers; domestic workers; those doing unpaid work, such as interns and bogus volunteers; social care workers; zero-hours contract workers and agency workers; those given bogus self-employed status; workers whose accommodation is tied to their job; and seafarers.

In each case, the TUC suggests specific steps to ensure that the workers concerned receive the minimum wage. For example, the TUC suggests that support for migrant workers could focus enforcement activity on sectors such as horticulture and meat-packing and provide publicity material in relevant languages for the workers in these sectors. The report says that recent Romanian and Bulgarian migrants are ‘an obvious focus for targeted support’.

Need for continuous improvement

Commenting on the report, TUC general secretary Frances O’Grady said:

Failing to pay the minimum wage is an anti-social 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. ... There should be a broad consensus between political parties, good employers and trade unions that the minimum wage must always be enforced effectively. 

Commentary

The national minimum wage, which was introduced in 1999, now enjoys broad support from business leaders and politicians across the political spectrum as well as trade unions. The incoming Conservative government’s manifesto for the May 2015 general election expressed strong support for the minimum wage and pledged to ‘take further steps to eradicate [the] non-payment of the minimum wage’. It remains to be seen whether the proposals put forward by the TUC for strengthening the enforcement of the minimum wage will help shape the new government’s approach in this area.