A new report into unpaid wages in Britain has shown that workers are being denied at least £2.7 billion of pay they are rightfully entitled to.
An early draft of Unpaid Britain, a report by Middlesex University and the Trust for London, conservatively estimated that workers are missing out on £1.2 billion in wages and £1.5 billion of holiday pay each year. These figures exclude unpaid statutory pay (such as maternity and sickness pay) and wages unpaid to the self-employed.
It also found that one in 12 workers do not receive a payslip and one in 20 receive no paid holidays. Workers are often unaware that employers are breaching their rights with these practices.
‘Little and often’ and ‘episodic’ theft
Here are the reports key findings:
- Wage theft is are commonly “little and often,” meaning underpayments are small enough for workers to continue in employment but still have an impact.
- There is also “episodic” theft, which includes not paying a worker’s last shift, outstanding holiday pay and not paying trial shifts.
- The sectors most likely to abuse workers in this way are sports activities, amusement and recreation, food and beverages services, other personal services, employment activities and accommodation.
- Workers under 25 and over 64 tended to be most impacted by underpayments.
- In competitive sectors like the arts, many younger workers feel compelled to accept unpaid work.
- Many of company directors the report investigated were still in directorial positions.
The report said worker tribunal fees, the absence of free legal advice and the complexity of bureaucracy often deters workers from challenging their employers. It called for better guidance, including teaching children about employment rights, better policing and a crack down on repeat offenders.
The total amount recovered from employers for National Minimum Wage non-compliance in 2015/16 was £10.3 million for just over 58,000 workers, more than double the £3.3 million recovered across 26,318 workers in 2014/15.
Unpaid wages is one of the most common reasons for taking an employer to an Employment Tribunal, and food bank charity the Trussell Trust said “delayed wages” was one of the most common reasons for using a food bank last year.
‘I fear that this is the tip of the iceberg’
Nick Clark, the lead author of the report from Middlesex University, said: “It has not been easy to find accurate data on the true scale of failure to pay wages in this country and I fear that this is the tip of the iceberg in terms of painting a realistic picture of unpaid Britain.”
“Our interim findings demonstrate that there is a desperate need for improved workers’ protection and better guidance on their rights and how these can be enforced,” he said. “With an uncertain Brexit around the corner, there has never been a more important time to safeguard, protect and enhance workers’ rights.”
The report grew out of Clark’s experiences of advising both UK-born and migrant workers, which suggested to him there was a problem with the labour market itself rather than the sorts of workers being hired.
The newly expanded and renamed Gangmasters and Labour Abuse Authority is the body responsible for dealing with labour exploitation and abuse in the UK. Unpaid Britain’s case studies are ongoing, and a final draft of the report is due to be published in November.
The gig economy
Workers’ rights have hit headlines recently with scandals including retail giant Sports Direct employing workers on zero hour contracts and a battle over whether Uber drivers are self-employed. Statistics released on Monday show unpaid carers in the UK are providing an estimated £57 billion-worth of social care every year.
The Unpaid Britain report coincides with the publication of a government report into the so-called “gig economy” — the rise in workers employed in insecure and irregular work through platforms like Deliveroo and Uber.
Prime Minister Theresa May announced on Tuesday she would work to secure the rights of workers but avoid “overbearing regulation” that could compromise employers. Critics said the government review, which suggested creating a new category of workers called a “dependent contractor,” does not go far enough.