Increase in number of UK employees paid less than the minimum wage

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The number of people in the UK who were paid less than the minimum wage increased in 2018, according to the Low Pay Commission (LPC).

The LPC released a report that revealed 439,000 people were paid less than the hourly minimum wage.

Of these, 369,000 were workers aged 25 and over paid less than the National Living Wage (NLW): this equates to 23% of those paid at or below the rate.

This is an increase of around 30,000 on the previous year’s level of underpayment of the NLW, or a 2 percentage point rise in the share of workers entitled to the rate. 135,000 people were paid below £7.20 per hour (the 2016 introductory NLW rate).

These estimates are subject to several caveats but are consistent with a trend of increasing underpayment since the introduction of the NLW in 2016.

LPC Chair Bryan Sanderson said: “Our analysis reveals that a worrying number of people are being paid less than the minimum wage. We recently celebrated 20 years of the minimum wage – it has raised pay for millions of workers, but it is essential that people receive what they are entitled to. It is also vital for businesses to be able to operate on a level playing field and not be illegally undercut on wages.”

The LPC’s new report looks at the most up to date statistical evidence on the extent of non-compliance with the minimum wage and uses evidence from stakeholders and the Government to reflect on the policy responses to non-compliance.

Women are more likely than men to be paid less than the minimum wage. Underpayment is also higher for the youngest and oldest workers. The largest numbers of underpaid individuals work in hospitality, retail and cleaning and maintenance; childcare is the occupation with the highest proportion of underpaid workers.

Useful links

Low Pay Commission Report

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National minimum wage rates