The Resolution Foundation think tank has conducted a study which showed that a quarter of minimum wage workers in the UK are being underpaid.
The Resolution Foundation research revealed an increase in UK companies not complying with minimum wage payments since the National Living Wage started in 2016. Prior to this, only around one in five workers aged 25 and over was underpaid.
While the government has expressed that it wanted to ensure all those eligible were correctly paid, over one in four workers are not being underpaid in the country. A government spokesperson said: “The government is determined that everyone who is entitled to the National Minimum Wage receives it.”
“All businesses, irrespective of size or business sector are responsible for paying the correct minimum wage to their staff. HMRC won’t hesitate to take action to ensure that workers receive what they are legally entitled to,” the spokesperson added.
The government spokesperson continued: “In 2018-19, HMRC completed over 3,000 investigations, identifying over £24.4 million, the highest amount in a single year, for more than 220,000 workers. Consequences for not complying with paying National Minimum Wage can include fines of 200% of the arrears, and, for the worst offences, criminal prosecution.”
The Resolution Foundation’s Under the Wage Floor study indicated that most firms want to pay the minimum wage and that fines are the main deterrent for offending companies. However, it also pointed out that the penalties are still far too low to stop companies from breaking the law.
Under the National Living Wage, the minimum wage for people aged 25 or older is at £8.21 per hour as of April 2019 and will increase to £8.72 in April 2020.
The Resolution Foundation’s senior policy analyst Lindsay Judge said: “The minimum wage has been one of the UK’s biggest policy successes in recent decades, delivering much-needed pay rises to millions of low-paid workers. Its success is dependent on employers taking it seriously, with those firms paying it not being undercut by a minority that fail to do so.”