Following extensive consultation dating back to July 2019 (which we blogged about at the time), the government has announced it will press ahead with its plan to establish a new workers’ watchdog when parliamentary time allows.
The new body will be responsible for tackling modern slavery, enforcing the minimum wage and protecting agency workers. These functions are currently under the watch of the Gangmasters and Labour Abuse Authority, HMRC’s National Minimum Wage Enforcement teams and the Employment Agency Standards Inspectorate, respectively.
The new body will also be responsible for trying to tackle the growing problem of umbrella companies. Recent estimates suggest that as many as 600,000 temporary workers in the UK are employed by umbrella companies. Their employment abuses are thought to cost workers around £4.5 billion a year. The government also plans to give the new body power to intervene to ensure that vulnerable workers are able to recover unpaid holiday and sick pay without needing to lodge a claim with an employment tribunal.
Enforcement of workers’ rights, and the efficiency with which this can be done, is key. The consultation found that around £33 million is being spent each year on enforcement for these areas alone. As well as reducing this expenditure, the government hopes a “one-stop shop” approach will help improve enforcement through better co-ordination and the pooling of intelligence.