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TUC: 170,000 are still earning less than the minimum wage

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Most employers now comply with minimum wage legislation, but today (Tuesday) as the TUC prepares to give evidence to the Low Pay Commission, it reveals new figures which suggest 170,000 workers are being paid less than the minimum wage.

Today (Tuesday) the TUC and the National Union of Students will be putting the case to the Low Pay Commission (LPC) to abolish the youth rate which currently sees 18 to 21 year olds earn 50p an hour less than older workers. And tomorrow (Wednesday) the TUC will again be talking to the LPC, this time giving its evidence on all aspects of the minimum wage.

A team from the TUC – including General Secretary John Monks – will tell the LPC that:

  • There must be a significant uprating in the adult minimum wage so that it rises from the current £3.70 rate to between £4.50 to £5 an hour.
  • A new minimum wage for 16 and 17 year olds should be introduced, based on a lower fixed percentage of the adult rate.
  • Uprating of the minimum wage should be based on annual references to the LPC
  • There must be a sustained and determined effort to guarantee effective enforcement of the minimum wage.

Also today (Tuesday) the TUC is publishing a new enforcement guide, jointly written with the Low Pay Network and the Low Pay Unit, to help unions and advice workers make sure all workers are earning at least the minimum wage.

The booklet – Enforcing the National Minimum Wage – gives advice on how unions can ensure local employers are paying the legal rate and covers the groups of workers entitled to receive the minimum wage, and those, such as 16 and 17 year olds, which are currently exempt.

Enforcing the National Minimum Wage points out that often all that is needed to make an employer start paying the minimum wage, is for a union to bring non-payment to their attention. But more unwilling employers will need the involvement of the Inland Revenue before they start paying their workers the legal minimum.

Government figures show since the minimum wage was introduced almost two years ago, the Inland Revenue has made over 7,000 visits to employers suspected of not paying the legal minimum rate, has issued almost 250 enforcement notices, and recovered £2.25 million in unpaid wages.

TUC General Secretary John Monks said: “Although most employers comply with the law, too many workers are still earning much less than they should be. Our guide will help unions root out the hardcore of non-paying employers who are trying to cheat their workers out of a legal wage. Together unions and the advice agencies will continue to do all they can to stop these criminal employers breaking the law.

“Today we will be arguing that the minimum wage needs to rise significantly in the future if low paid workers are to avoid falling back into poverty. We also want to see an end to the situation where younger workers are paid less an hour than their older colleagues. After all their living costs are just the same.”

The TUC figures on the numbers of people who are being paid hourly rates less than the legal minimum are based on government figures which suggest that 300,000 people are not getting the adult rate. The TUC estimates that some 130,000 employees are probably not earning £3.70 an hour for legitimate reasons (perhaps because they are on accredited training courses and are getting the £3.20 training rate or are being paid less an hour because they receive free or subsidised accommodation). This leaves 170,000 who should be getting the minimum wage but who are not.

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