Dear Prime Minister,
Re. Enforcement of the National Minimum Wage
I am writing to you following publication of the Low Pay Commission’s annual report on non-compliance and enforcement of the National Minimum Wage. The report contains a number of stark warnings on the impact covid-19 could have on underpayment of the minimum wage, along with a series of recommendations which I hope you will closely consider.
The report warns that growing unemployment as a result of the covid-19 pandemic means that non-compliance of the minimum wage risks growing. It states, “the effects of Covid-19 on the labour market will only tend to weaken the incentives for workers to report underpayment”. It makes clear that Government intervention thus far has been lacklustre and more support is needed to stop this issue from escalating further.
The report offers a series of common-sense recommendations to help alleviate this growing issue. For instance, an information drive is needed to ensure that people are aware of the complaints system available if they are not being paid properly. This must be particularly targeted to groups most at risk of low pay, including those for whom English is not their first language. The report also calls on the Government to work more closely with Trade Unions on this, stating that it would be “an important tool in reinforcing routes for complaints and building an understanding among workers of how the enforcement system works.”
A decade of severe underfunding coupled with the covid-19 crisis has meant that our tribunal system is under enormous pressure. Citizens Advice have found that demand for tribunals rose in 2020, but covid has limited their operations. All this has resulted in the average waiting time for a tribunal hearing to rise to over 12 months. Furthermore, research by the Resolution Foundation has shown that those most at risk of underpayment are less likely to make a claim. Our justice system is failing those who need it most and I urge you to step in and ensure that everybody is able to bring cases forward in a timely manner.
In addition, it is disappointing that the role of Director of Labour Market Enforcement has been vacant for over five months. The Low Pay Commission’s report calls for this post to be filled as an urgent priority so that minimum wage enforcement can be properly coordinated. I note that the post is advertised on Cabinet Office website, which states that applications closed on the 7th March 2021 but offers no further information on the timing of the next stages of the process. Could you provide an update on when we can expect the role to be filled?
Also, the Private Eye has alleged that the outgoing Director in January 2021, Matthew Taylor, offered to remain in his post unpaid until a replacement was found, but the Government turned down this offer. Could you please clarify whether that was the case? And if so, what was the Government’s rationale behind letting the role go unfilled for so long when it could have been filled on an unpaid basis temporarily?
It is scandalous that in 2021 people are still being refused their right to be paid the National Minimum Wage. Increased funding and a more coherent strategy are urgently needed to get a handle on this growing problem. I therefore urge you to closely consider the points made in the Low Pay Commission’s report and urgently bring forward measures to improve enforcement.
Gill Furniss MP
Member of Parliament for Sheffield Brightside and Hillsborough