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Record number of workers illegally paid less than minimum wage

According to a report conducted by the Low Pay Commission (LPC), a record number of UK workers are still being paid below the minimum wage.

The report has revealed that around 440,000 people were illegally paid under the hourly minimum wage in April last year, with 369,000 of those meant to receive the national living wage (NLW) because they are aged 25 or over.

The living wage figure saw an increase of 30,000 on the previous year, a record high since the NLW was introduced in 2016.

Currently, the NLW is at £8.21 per hour, whilst the minimum wage for younger workers stands at £7.70 for 21-24-year-olds, £6.15 for 18-20-year-olds, £4.35 for under 18’s and £3.90 for apprentices.

The LPC report also found that a greater number of women were underpaid compared to men and those at both the youngest and oldest ends of the spectrum were more likely to be underpaid than others.

The industries most affected include hospitality, retail, cleaning and childcare.

These findings have prompted calls by LPC to revert to previous methods of naming and shaming employers who underpay their staff and improve the ways in which the laws surrounding minimum wage are enforced.

In the past, companies including the likes of Wagamama, Marriott Hotels, TGI Friday’s, Stoke City Football Club and Shoe Zone had been named by the Government for paying less than the legal minimum wage.

LPC Chair, Bryan Sanderson, said: “It is vital for businesses to be able to operate on a level playing field and not be illegally undercut on wages.

“The Government has made real progress with its enforcement of the minimum wage, but more needs to be done to ensure employers comply in the first place and workers know how to enforce their rights.”

A spokesperson for the Government said it was cracking down on employers who failed to pay the minimum wage.

Amanda Hyam, a Senior Associate with Mander Hadley, who specialises in employment law, said: “Paying the National Living and Minimum Wages are not optional for employers – the law is clear on this and workers have a legal right to expect to receive, at the very least, the minimum rate of pay.

“This latest review suggests that more employers than ever are breaking the law. HMRC takes the matter very seriously and will prosecute employers who are found to be underpaying their staff.”

For help and advice on all aspects of employment law including advice if you are concerned that your pay does not meet national minimum wage rules, please contact us.

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