At least 300,000 workers in the UK are being paid below the national minimum wage. This report surveys the extent and nature of this non-compliance in London, and sets out steps that we could take to tackle it.
Since 1999, all employers have been required to pay their employees at least the minimum wage. The wage is set to ensure that it does not damage the economy or cause unemployment. But too many employers fail to comply with the law and do not pay their workers what they are due.
While the problem of non-compliance is by no means limited to London, it is a particularly significant problem for the capital.
The report highlights three main reasons why London is a hot spot for National Minimum Wage non-compliance:
- Sheer volume of low-paid work;
- High proportion of immigrant labour;
- Concentration of high-risk industries, eg construction, retail and hospitality.
Among other reforms, this report contends that the public sector should do more to ensure the companies it employs, such as care providers, do pay the minimum wage and recommends that local authorities should play a greater role in enforcing it.
We discussed this report, as well as our proposals for a higher London minimum wage, with a panel of experts at a public event in December 2013.