Why don’t workers report NMW underpayments?

The Low Pay Commission (LPC) have repeatedly stressed the importance of Government action to encourage workers to make complaints about employers who underpay. Many groups indicate a reluctance of exploited workers to bring complaints.

The numbers of complaints about underpayment look minuscule compared to the LPC statistical estimates. It is considered that the problem is likely to be deepest for the workers suffering the most severe forms of exploitation.

The Government can try to increase the pipeline of complaints by informing workers of their rights or making the complaints system more user-friendly for workers. BEIS and HMRC carry out both national and targeted information campaigns, with HMRC’s targeted ‘Promote’ work having expanded in recent years.

In the LPC blog they use Leicester as an example – where a culture of exploitation seems deeply rooted in a particular location and sector. This suggests work may need to be more targeted. In Leicester, localised campaigns have been piloted by third-sector groups, targeting the communities most vulnerable to exploitation. There is a case for looking further at initiatives.

Placing the burden on individual workers to raise and pursue complaints creates considerable pressure; many underpaid workers are likely to be reluctant if they feel their employment is precarious, they do not have English as a first language or if they are fearful about their immigration status.

In recent years the LPC have called for changes to the third-party complaints system. They have heard consistently about the opacity of the system for third parties, especially unions raising complaints on their members’ behalf, with little to no feedback on cases they raise. This opacity undermines confidence in the enforcement system.

It is suggested that building confidence in the third-party complaints system would ease some of the burden of making complaints for the most vulnerable workers. But to bring forward complaints, those workers need support and encouragement from institutions that they trust: unions, charities or community groups. The LPC suggest that the development of institutional support has to be part of the solution.

PAYadvice.UK 26/8/2020 (adapted from an LPC blog by Joseph Wilkinson)

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