Younger and older workers are the most likely to miss out on basic employment rights, such as holiday and the right to a payslip, according to a new report.
Around one in 20 workers report not receiving any of their legal holiday entitlement, while around one in 10 do not receive a payslip, according to new analysis by the Resolution Foundation think tank.
The Foundation says that HMRC identified a record 200,000 cases of workers not receiving the minimum wage as a result of its enforcement work last year, with the Foundation’s analysis finding that at least a quarter of those earning within 5p of the minimum wage are paid less than the legal minimum.
The analysis shows that younger workers and those over 65 are least likely to receive a payslip. Around one in six workers aged 65+ report they have no paid holiday entitlement, more than any other age group, while workers aged 25 and under are almost twice as likely be underpaid the minimum wage as any other age group.
The analysis finds that workers in the hotels and restaurants sector are the most likely to miss out on minimum legal workplace entitlements. Around one in seven workers in the sector report receiving no holiday entitlement, three times the rate across the rest of the economy, while around one in seven do not receive a pay slip (a rate 50 per cent higher than the rest of the labour market).
The analysis also finds that 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 Foundation says that, despite increases in resources for enforcement, 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, it says that those workers who are most likely to require redress through the ET system are the least likely to use it. For instance, it notes that young people are disproportionately likely to be subject to unlawful working practises, but make far fewer applications than any other age group. In contrast, managers are the least likely to be subject to labour market violations, but are among the most likely to make tribunal claims.
The Foundation says that the scale of labour market abuse highlights the need for the state to step up to ensure the UK’s labour market rules are better enforced. It welcomes the government’s plans to create a new single enforcement body to tackle labour market abuse, though it says that the new body must be properly resourced in terms of funding and staff, and have legal teeth.
Lindsay Judge, Senior Economic Analyst at the Resolution Foundation, said: “Our analysis suggests that while violations take place across the labour market, the government should also 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.”