The Trade Union Congress – a group of trade unions representing around 6.2 million UK workers – has today issued a report highlighting the methods used by many unscrupulous employers to avoid paying their workers the National Minimum Wage.
The report highlights the use of bogus self-employment and employment intermediaries (such as using agency workers) as common tactics used by employers looking to avoid paying the Minimum Wage. To address this and other common avoidance techniques, the TUC recommends an extra £1 million per year is earmarked to tackle the problem, and 100 extra wage inspectors hired to investigate offending businesses.
More stringent penalties are also called for to punish those who flout the rules, including fines of up to £75,000 and criminal prosecutions.
Frances O’Grady, General Secretary of the TUC, said:
“Failing to pay the minimum wage is an antisocial act that squeezes those workers who have the least. There should be no hiding place for cheapskate bosses who try to cheat their workers out of the minimum wage.
“We must engage in a constant battle to ensure that every worker gets at least the minimum. It is clear that some employers are actively looking for new ways not to pay even the legal minimum.
“There should be a broad consensus between political parties, good employers and trade unions that the minimum wage must always be enforced effectively. We urge everyone to support the TUC’s plan for ensuring continuous improvement to the minimum wage system.”
The Government already uses IR35 legislation to tackle false self-employment – however investigations under IR35 rules are lengthy and uncommon, and usually punish the employee or contractor, rather than the employer.
You can read the full report here.