Employment

Over 500 employers named for 'cheating workers' out of minimum wage – but it's worse than you think

Over 500 businesses have “cheated workers” by failing to pay them minimum wage – but the true figure is much higher, unions have warned.

The government has named and shamed over 500 employers for underpaying workers. Left to right: Canva, Mike Peel / Wikimedia commons, Zakarie Faibis /Wikimedia commons

Over 500 businesses have “cheated workers” by failing to pay them the legal minimum wage – but the true figure is much higher, experts have warned.

Some 5% of British employees earn minimum wage, currently a little over £10 per hour for most adults. Yet thousands of these workers are actually paid below this legal threshold.

The government has named and shamed 524 businesses – including Staffline Recruitment, easyJet, Greggs, and Currys – for breaches of minimum wage law, ordering them to repay workers nearly £16m plus an additional financial penalty.

Such underpayment is “absolutely disgraceful,” said Afzal Rahman, a policy officer with the Trade Union Congress, particularly given that the minimum wage is “already far too low.”

“The minimum wage is insufficient to live on. Yet the scale of underpayment is huge,” he said. “You shouldn’t have to rely on a government investigation to be paid the minimum wage.”

Most companies blamed technical errors or misinterpretations of law; some required staff to pay for their uniforms or failed to pay them for the time that they spent changing into work clothes.

Pleading ignorance is not enough, Rahman said, adding that “nobody should make mistakes” when wages “teeter on the edge of legality.”

“If you pay people decently, you don’t make those kind of mistakes, because small errors don’t take you below the payment threshold,” he said. “There are some really significant high street names on that list. Those sorts of organizations, in particular, should have dotted all their i’s and cross all their t’s, because people are really, really struggling.”

Employers must comply with the law, said Patricia Rice, independent commissioner at the Low Pay Commission.

“At a time when the cost of living is rising, it is more important than ever that these workers receive the pay to which they are entitled,” she said.

“National Minimum Wage underpayment not only cheats workers of their rightful due, it leaves compliant firms undercut by those who do not abide by the law.”

How many people earn below minimum wage?

The government has warned businesses that “there are repercussions to undercutting hard work from their staff.”

“Employees deserve to get paid properly for the hard work they put in,” said  Kevin Hollinrake, minister for enterprise, markets and small business.

In total, the investigations led to repayments for 172,000 workers. But the true scale of non-compliance is far greater: according to the Office of National Statistics, 366,000 employees aged 16 years and over were paid less than the minimum wage last year.

The TUC is calling for the government to invest in enforcement resources and recruit more labour market inspectors.

“We need investment to catch people out, and so that employers don’t make the decision that ‘you know what? We don’t have to bother,” Rahman said.

“You make less so-called honest mistakes if you are held to account.”

What is the UK National Minimum Wage?

The legal minimum wage for workers aged 23 and above is known as the “national living wage”, which is currently £10.42. It is to be replaced by the government later this year with the National Minimum Wage, which differs depending on a worker’s age.

From April, the National Minimum Wage will increase to £11.44 per hour for all adults aged 21 and over, £8.60 for 18 to 20-year-olds, and £6.40 for under 18s and apprentices.

The increase is welcome, according to the National Living Wage Foundation – but still not sufficient.

“With the cost of living crisis far from over, earning a Real Living Wage has never been more important,” said Katherine Chapman, Living Wage Foundation director.

What is the UK Real Living Wage?

The Living Wage Foundation set a Real Living Wage, a voluntary rate of pay that employers can sign up to. At £12 per hour across the UK and £13.15 in London, it is now £3,000 more per year than the legal minimum wage, a difference that rises to more than £5,000 in London.

The Real Living Wage made headlines recently after BrewDog and Capita told staff they could no longer afford to pay the rate.

Research released by Living Wage Foundation earlier this month showed that 3.7 million UK jobs, or one in eight, were paid below the Real Living Wage in April 2023 – 200,000 more than a year earlier. In the hospitality industry, the rate is nearly half (48.1%).

Previous polling of these low-income workers suggests that around 60% have visited a food bank in the past year and 39% regularly skip meals for financial reasons. Half (50%) report feeling worse off than a year ago.

The TUC is calling on the government to introduce a £15 per hour minimum wage.

“When it comes to underpayment, speak to your union, report it to HMRC,” Rahman said.

“But the current rate is not remotely enough. TUC want all workers to be paid £15 an hour. It needs to go up every year, and needs to go up in a way that improves living standards.”

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
Millions of Brits think their jobs are 'meaningless.' Could a four-day working work week fix that?
Four-day working week

Millions of Brits think their jobs are 'meaningless.' Could a four-day working work week fix that?

'What are we going to do?': Misery for commuters as train strikes continue
Train strikes

'What are we going to do?': Misery for commuters as train strikes continue

British farmers demand universal basic income to prevent bankruptcy in wake of Brexit
Farmer mental health
Universal Basic Income

British farmers demand universal basic income to prevent bankruptcy in wake of Brexit

Rolling driver walkouts and crippling shut downs: Will the Tube and train strikes ever end?
Rail strikes

Rolling driver walkouts and crippling shut downs: Will the Tube and train strikes ever end?

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know