A new report from the Low Pay Commission (LPC) has revealed that up to 20% of minimum wage workers may be receiving less than they are legally entitled to.

At its peak in the year, between 305,000 and 580,000 workers are paid less than the legal minimum. However, the LPC highlights that a large percentage of non-compliance is ‘frictional’, meaning that it takes time for some employers to start paying the new minimum wage rates after they are introduced. Levels are at their highest immediately after an uprating and decline by around half over the three-six months that follow.

Report Findings

Additional key findings of the LPC’s report include:
“The Low Pay Commission has always had a strong interest in compliance with the minimum wage rates it recommends,” commented Chair of the Low Pay Commission Bryan Sanderson. “There is, after all, little point in having a minimum wage if workers do not receive the correct rate.”
“With more workers than ever paid the minimum wage or close to it, more people are at risk of being underpaid,” he added. “Our analysis finds that up to one in five people who should be paid at least the minimum wage may in fact receive less. This equates to between 305,000 and 580,000 workers at its highest point, though it is a difficult thing to measure.”

LPC Recommendations

In its report, the LPC has made a number of recommendations for further action by Government, including:

Next Year’s Rates to be Determined

The LPC will soon be making recommendations to Government on the levels of NLW and NMW rates to apply from 1st April 2018.
In advance of this, the TUC has call for greater provision for younger workers. In particular, it is calling for:

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