Low Pay Commission – minimum wage underpayment on the rise

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.

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Tom Fancett

About Tom Fancett

Tom has experience acting for both employers and employees, advising on the full spectrum of contentious and non-contentious matters. His experience includes advising on large commercial transactions, including redundancy and TUPE issues; undertaking buy side and sell side due diligence exercises into the employment aspects for multiple commercial transactions; coordinating multijurisdictional projects; defending Employment Tribunal claims in relation to unfair dismissal, disability and sex discrimination and whistleblowing; advising on day-to-day HR and disciplinary issues; drafting and negotiating settlement and service agreements; and reviewing company handbooks and template employment contracts.

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