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Low Pay Commission – minimum wage underpayment on the rise

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A new report from the Low Pay Commission has found that the underpayment of workers on statutory minimum wage increased in 2018.

In the year to April 2018, the Commission found that 439,000 people were paid less than the statutory minimum rate to which they were entitled. Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW), which represents an increase of approximately 30,000 on the previous year’s level of underpayment of the NLW.

The report also found that women are more likely than men to be paid less than the minimum wage, whilst underpayment is higher for the youngest and oldest workers. Hospitality, retail, and cleaning and maintenance are the industries where the highest number of people are paid below the minimum wage and childcare is the occupation with the highest proportion of underpaid workers.

While the statistics are worrying from a wider socio-economic standpoint, employers who fail to pay the minimum wage also have cause for concern. They risk not only being subject to tribunal claims but can be taken to civil court by HMRC, publicly named and shamed, and subjected to a fine of up to £20,000 per worker.