Illegal Labour Practices: Are you being paid?
This week, the Resolution Foundation thinktank published some analysis with shocking findings of illegal working practices across three key employment rights in the UK, namely:
- Paid Holidays: around 1 in 20 workers report receiving no paid holiday entitlement, despite being legally entitled to at least 28 days a year (pro-rated accordingly for part-time workers).
- Payslips: almost 1 in 10 workers do not receive a legally required payslip, making it hard for workers to calculate whether they are receiving the right level of pay, pension and holiday entitlement and to check for deductions.
- National Minimum Wage: HMRC identified a record 200,000 cases of workers not receiving the minimum wage as a result of its enforcement work last year, with the Foundation’s analysis finding that at least a quarter of those earning within 5p of the minimum wage are paid less than the legal minimum.
Demographically, their analysis shows workers aged under 25 and over 65 are most likely not to receive a payslip; whilst 1 in 6 workers aged 65 and over report having no paid holiday entitlement. Workers aged 25 and under are almost twice as likely be underpaid the minimum wage as any other age group.
The hotel and restaurant sector are found to be the worst culprits, with around 1 in 7 workers in the sector reporting not receiving any holiday entitlement nor a payslip. Workers in small firms with fewer than 25 employees are also more likely to miss out on payslips and holiday leave.
These are basic legal rights, which most of us have come to expect as standard. Yet we have all seen the increase of workers in the gig economy, many of whom are not guaranteed employment rights such as sick and holiday pay, resulting in public disputes about their employment status. With over 32 million people in the UK workforce, discounting the self-employed, the thinktank’s research suggests there are at least a million people across the UK being denied their rights in some way.
Unfortunately, the Resolution correctly identifies that the UK still largely relies on individuals taking their employers to the Employment Tribunal, which received over 100,000 applications last year, and that it is those workers who most need to claim that are the least likely to do so – namely, young people.
What is the answer to a fairer labour market?
The government’s plans to create a new single enforcement body to tackle labour market abuse is a good start but is unlikely to be enough on its own. Resources will need to be targeted to the worst industry sectors, to include educating employers to recognise that better working practises result in better performance and more profitability. The basics of employment law need to be taught to our children in higher education, so that they can understand the rights, responsibilities and protections that they should face in a workplace.
All our articles are intended for informational purposes only and do not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information provided.