Minimum Wage

Trade and Industry written question – answered on 19th April 2004.

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Photo of Malcolm Bruce Malcolm Bruce Shadow Secretary of State for Business, Innovation and Skills, Shadow Secretary of State for Trade and Industry

To ask the Secretary of State for Trade and Industry what estimate she has made, for each year since the introduction of the national minimum wage, of (a) the number of employers not complying with the national minimum wage provisions and (b) the level of underpayment of the national minimum wage.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

The information is as follows.

(a) Data on the number of employers not complying with the minimum wage is not available. However, from April 2003 to February 2004 the Inland Revenue have investigated nearly 5,000 cases of suspected underpayment and found nearly 2,000 cases where employers were non-compliant, identifying £2,250 million in arrears of pay.

(b) Given that the Government does not produce estimates of the number of workers not complying with the legislation the level of underpayment cannot be estimated. However, the Office for National Statistics, do however publish the number of jobs paying below the NMW (see following table), but these are not an estimate of non-compliance because they include employees who are legitimately being paid below the NMW levels (for example, those who are receiving accredited training or where the employer provides accommodation).

Number and proportion of jobs paying below the national minimum wage
Amount £ Percentage
Spring 2000(44) 240,000 1.0
Spring 2001(45) 250,000 1.0
Spring 2002(46) 330,000 1.3
Spring 2003(47) 260,000 1.0

(44) Rate was £3.00 per hour (aged 18 to 21 years) or £3.60 per hour (aged 22 years and over).

(45) Rate was £3.20 per hour (aged 18 to 21 years) or £3.70 per hour (aged 22 years and over).

(46) Rate was £3.50 per hour (aged 18 to 21 years) or £4.10 per hour (aged 22 years and over).

(47) Rate was £3.60 per hour (aged 18 to 21 years) or £4.20 per hour (aged 22 years and over).

Source:

Office for National Statistics central estimates of low pay.

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