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Employment law violations are "far too common"

17 September 2019

One in 20 UK workers are not getting holiday pay and one in ten don't get a payslip, according to the findings of new research on employment practices.

The report on employment law violations has been published by the Resolution Foundation. It uncovers the extent of unlawful working practices across the UK, and identifies where abuse is most common.

Focusing on three key labour market violations, the report has found that:

  • Around one in 20 workers get no paid holiday entitlement, despite being legally entitled to at least 28 days a year;
  • Almost one in ten workers does not receive a legally-required payslip, making it hard for workers to check if they're receiving the right level of pay, pension and holiday entitlement;
  • HMRC has identified a record 200,000 cases of workers not receiving the minimum wage as a result of its latest enforcement work.

The analysis by the Resolution Foundation reveals that the likelihood of a worker being subject to labour market violations is closely connected to their personal characteristics, their type of employment contract, the firm they work for and the industry they work in.

Workers aged under 25 and over 65 are the most likely not to receive a payslip. Around one in six workers aged 65+ say they have no paid holiday entitlement, more than any other age group, while workers aged 25 and under are almost twice as likely to be underpaid the minimum wage as any other age group.

The analysis finds that workers in the hotel and restaurant sector are the most likely to miss out on minimum legal workplace entitlements. Around one in seven workers in the sector gets no holiday pay and one in seven does not receive a pay slip.

Workers in small firms (employing fewer than 25 employees) are most likely to miss out on pay slips and holiday leave, as are workers on zero-hours and temporary contracts.

The government has taken steps to increase both the resources and powers of bodies such as HMRC and the GLAA (Gangmasters and Labour Abuse Agency) in recent years. However, the UK still largely relies on individuals to hold non-compliant firms to account, with the Employment Tribunal (ET) system receiving over 100,000 applications last year.

However, the Resolution Foundation has found that those workers who are most likely to require redress through the ET system are the least likely to use it. For example, young people are disproportionately likely to be subject to unlawful working practises, but make far fewer applications than other age groups. Meanwhile, managers are the least likely to be subject to labour market violations, but are among the most likely to make tribunal claims.

"The UK has a multitude of rules to govern its labour market - from maximum hours to minimum pay. But these rules can only become a reality if they are properly enforced," said Lindsay Judge, senior economic analyst at the Resolution Foundation.

"Labour market violations remain far too common, with millions of workers missing out on basic entitlements to a pay slip, holiday entitlement and the minimum wage … Our analysis suggests that while violations take place across the labour market, the government should prioritise investigations into sectors like hotels and restaurants, along with firms who make large use of atypical employment contracts, as that's where abuse is most prevalent."

Written by Rachel Miller.

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