Low Pay Commission reports worrying statistics of underpayment of wages

Almost one in four British workers on the government’s national living wage are paid less than they should be, according to official figures, with more women than men hit by underpayments. The figures revealed by the government’s Low Pay Commission showed that 369,000 workers – representing about 23% of all of those over the age of 25 who are covered by the national living wage – were paid less than that amount this year. This showed that the number of people affected by underpayment rose from about 339,000 a year ago.

The living wage is independently calculated, voluntary and based on the cost of living. There are two rates, to recognise the higher cost of living in London. These are:

London living wage: £10.20 per hour

UK living wage: £8.75 The national living wage is a statutory minimum all employers must pay staff aged over 25.

National living wage (formerly the minimum wage): £7.83 (other minimum rates of pay apply to workers under the age of 25).

Women were more likely than men to be underpaid the living wage they should have received, while the worst-offending sectors of the economy were in retail, hospitality and cleaning and maintenance. About 1.6 million workers in Britain have their wages set at the national living wage, which is the legal minimum for workers over the age of 25. Having risen from £7.50 per hour in April to £7.83 an hour, Philip Hammond, the chancellor, announced that it would increase again to £8.21 an hour in April.

However, hundreds of thousands of people on the living wage do not always receive the pay rises due to illegal underpayment or mistakes by their employer when the increases are made by the government. Ministers have been urged to impose tougher penalties on companies that pay their staff below the minimum wage, after government figures published two months ago showed that only £14m in fines was taken in a year when rogue employers underpaid their staff by £15.6m.

It is a criminal offence not to pay the minimum wage. Firms found in breach must repay staff all the money they are owed and could face a maximum fine worth 200% of every penny underpaid.