Low Pay Commission report: Minimum wage underpayment in Leicester textiles manufacturers
27 July 2022
The Low Pay Commission (LPC) has released a report looking into the non-compliance and enforcement of minimum wage in Leicester. A number of agencies have taken enforcement action in the city since 2020.
In a press release, published alongside the report, the LPC gives some background to the report and why it is important. There is a disparity between the enforcement action taken and evidence gathered by commissioners. Non-compliance was found to be modest by enforcement bodies, while individuals believe the problem to be widespread and intentional.
The report identifies three potential reasons for this apparent disconnect:
- Firstly, on the positive side, recent changes within the textiles industry mean some evidence of underpayment may be historic and so less reflective of current situation.
- Secondly, the vulnerability of workers means they may be reluctant to provide information.
- Thirdly, there remains potential for employers to conceal underpayment from investigating bodies.
Chair of the LPC, Bryan Sanderson, commented:
“The evidence we heard from workers in Leicester was striking. Despite some positive recent progress, job insecurity, a poisonous workplace culture and low expectations leave workers trapped in poor-quality jobs and vulnerable to exploitation. These same factors mean they are unlikely to report abuses, which undermines efforts to enforce workers’ rights.”
Low pay commissioners concluded that the government should take on the following recommendations:
- The process for reporting abuses does not work for the most vulnerable low-paid workers; but it also fails to engage the third-party bodies whom workers may trust more, or wider industry networks. Commissioners recommend HMRC looks at ways to address these problems.
- There is an ‘information gap’ between what industry and civil society groups think they have reported to official bodies, and what those official bodies are able to share and act on. A forthcoming official review of enforcement operations in Leicester should take into account evidence from both sides of this gap.
- Insecure work and uncertainty over hours and incomes are central to the vulnerability of workers to exploitation. Low Pay Commissioners urge the Government to take action on the measures recommended by the Commission in 2018 to address these issues.
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