23.01.09

1.5 Million Workers Still Being Cheated Out of the Minimum Wage, says TUC

Nearly a decade after the national minimum wage (NMW) was introduced, the TUC has calculated that at least 1.5 million workers are still being cheated out of the NMW by dishonest employers.

Although last year £3.9 million was recovered from law-breaking bosses, the TUC estimates that hundreds of thousands of workers are still taking less money home than the law says they should be.

To try to help track down rogue employers who are deliberately avoiding paying their adult staff £5.73 an hour, the TUC has published an updated edition of its enforcement guide to the NMW.

According to the TUC, those being cheated out of the minimum wage are most likely to be in London, the North West and Merseyside, or the South East, and to be employed in hotels, bars and restaurants, retail or hairdressing.

Last week the Low Pay Commission - the body that recommends any increases in the NMW - requested to be allowed longer to come up with this year’s recommendation. Instead of reporting at the end of February, it has been granted an extension until the 1st May.

Commenting on the extension, Professor Sir George Bain, Chairman of the Commission, said:

“The Low Pay Commission has always based its recommendations on research, evidence and analysis of economic data. This year, the National Minimum Wage faces up to its first recession. By delaying its report until 1 May, the Commission will have access to two month’s additional data, including the Bank of England’s next Inflation Report, employee jobs figures for December 2008, GDP figures for the fourth quarter of 2008 and updates on average earnings. The delay will not have an impact on the planned date for implementation of the new rates, 1 October 2009.”

Reacting to the news, the British Chambers of Commerce claimed it had won the first hurdle in persuading the Low Pay Commission to recommend a freeze on the National Minimum Wage.

David Frost, Director General of the British Chambers of Commerce, said:

“We’re not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase the NMW.

“Most businesses are prioritising survival at the moment. A rise in minimum wage would not help firms hold onto staff and would simply add to unemployment. We continue to urge the Low Pay Commission to recommend a freeze.

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