A new report by the Low Pay Commission estimates three hundred and seventy thousand workers were underpaid in April 2024, this marks a slight increase on the previous year.
This report arrives at a moment of transition. The Employment Rights Bill proposes new single enforcement body, the Fair Work Agency (FWA). The FWA will bring enforcement of the NMW together with that for other workers’ rights. Non-compliance takes a range of forms, from inadvertent mistakes to negligence to deliberate underpayment and the most serious forms of abuse and exploitation. All of these have in common workers being denied their due wages.
Among low-paying sectors, education, childcare and office work have the highest rates of underpayment. There were 140,000 NLW jobs underpaid by more than 50 pence per hour, with a similar number paid within 10p of the NLW. For a full-time worker, being underpaid by 50 pence per hour would mean losing out on nearly £1000 per year.
Some groups of workers, too, are inherently more vulnerable to underpayment; migrant workers are one of the groups most frequently cited, particularly given the risk of losing their visa sponsor if their employer is sanctioned.
Salaried workers make up a smaller (but growing) share of the low-paid workforce, but they now represent the majority of underpayment of the NLW, by more than £1 per hour. Employers tend to make smaller errors when it comes to their hourly-paid employees than those with an annual salary, with salaried workers more likely to work extra unmeasured hours beyond those for which they are contracted.
It is also possible that a fast-rising NLW has caught some employers of salaried workers unaware of the annual salary required to be compliant.
Recent TUC research (Trades Union Congress, 2024) found a range of jobs being advertised on online job boards at salaries below the annualised NLW of £20,820.20 for a 35 hour week. In one day, a non-exhaustive search found 46 full-time jobs advertised at rates below the NLW. While the rates advertised may be legal for younger workers, more than half the jobs stated experience was required.
As the TUC reported, “One advert, for a graduate copywriter in Hampshire, gave an annual salary range from £15,000 - £20,000. Another, for an assistant accountant with a minimum of two years’ experience, gave a salary range of £16,770 - £22,308.”
Any practice which does not conform with the legislation on the minimum wage, and which leads to workers not receiving the pay they’re entitled to, is underpayment.
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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
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