National minimum wage is still an issue

While the majority of our clients are aware of National Minimum Wage (NMW), many are still being paid below NMW. The problem is not limited to informal sectors and micro enterprises. For example, one of the clients who was paid below NMW was working ‘cash in hand’ in a local post office.

Many Eastern European nationals are being offered hourly rate below NMW. They are very likely to accept it if they feel they won’t be able to secure any other job. One client was told to ‘f..k off to work next door where she will be paid even less’.

In other cases the hourly rate offered meets NMW criteria. However, individuals are asked to work overtime for which they are not paid or not able to take time off in lieu. Consequently, they are paid well below NMW.

Problems with NMW are frequent in small businesses, for example corner shops, as well in agencies as underpaying employees is one of the tools that businesses use to reduce cost of their products or services in order to be more competitive. In short, for some, exploiting employees by not paying them NMW, it’s a business model.

According to information from HMRC, it takes up to 2 years to investigate one case of NMW and an individual making a complaint has to disclose all personal details, otherwise the case is not treated as a priority. Moreover, because in many Eastern European countries working in breach of employment regulations is seen as an illegal act on behalf of employer and employee alike, people are afraid of being punished if they identify themselves fully to HMRC which means even less workers are likely to refer to this instrument and a low number of cases are taken up by the service.

Our client U worked in a restaurant where all staff were paid below  (NMW). She hardly ever got her payslips. The employer sometimes paid her by cheque and sometimes ‘cash in hand’. U and her colleague approached us asking for support as they reported their employer to HMRC few months ago but believed that no action was taken.

According to the contract, U worked not in the restaurant but for an agency that did not exist (her real employer, the owner of the restaurant, made up the name and other details of that agency).

We helped U to write a letter to her former employer requesting unpaid wages but the employer ignored the correspondence. Consequently, we supported her to make an Early Conciliation notification to ACAS.

With our help, U recovered all the money she was owned.

Challenging unscrupulous employers delivers justice to vulnerable workers but it also empowers them to protect their rights in the future. And this is our mission here at EERC.

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