Calls for the Government to do more to protect workers from underpayment

The Resolution Foundation is leading calls for the Government to improve the enforcement of the minimum wage after it emerged that only one in eight firms breaking the rules are being caught by HM Revenue & Customs (HMRC).

Research by the think tank found that there has been a sharp increase in the number of workers underpaid, with an estimated 11,000 firms failing to pay workers the legal minimum wage during 2018/19.

However, HMRC inspectors identified only 1,456 of those breaking the rules and there are additional fears that the above-inflation minimum rate rise to £8.72 per hour due in April 2020 could result in more employers breaking the rules.

The research also found that around one in four workers over the age of 24 were paid below the legal minimum wage last year, with people working for small firms such as hair salons and carwashes most at risk of being underpaid.

Under current rules, companies who break the law in this manner are required to repay the wage arrears. If repayments are made, then any fines issued by HMRC can be reduced.

A Government scheme naming and shaming employers caught paying under the minimum wage was also suspended in December 2018 after concerns that some firms were being shamed on technical rather than deliberate breaches.

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