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.”
