Covid-19 pandemic has led to increased risk of minimum wage underpayment, says Low Pay Commission

Commission Chair calls for 'disciplined but innovative management response' to non-compliance in post-lockdown period

The Covid-19 pandemic has led to an increased risk of minimum wage underpayment, according to the Low Pay Commission (LPC).

Introducing a new report on minimum wage underpayment in 2021, the LPC says that -

'The Covid-19 pandemic has left low-paid workers more vulnerable and businesses under greater pressure than ever before. This increases the risk of minimum wage underpayment and demands a proactive and strategic response from the Government.'

The LPC adds that, although the government has accepted more than twenty of its recommendations on non-compliance and enforcement since 2017, more remains to be done -

• to build workers’ confidence in the enforcement system;
• to support employers to comply with the rules; and
• to target HMRC’s limited resources transparently and effectively.

Commenting on the report's findings, Chair of the LPC Bryan Sanderson said today -

'Underpayment is a serious threat to the success of the minimum wage. The evidence we have heard, from workers and employers alike over the past year, leaves little doubt about the strains placed on low-paying sectors by the pandemic and the increasing risk of non-compliance.

The enforcement body has so far responded pragmatically to the challenges of protecting workers’ rights during Covid, and we welcome government’s acceptance of our recommendations last year.  It is however clear that the effects of the pandemic will outlast the lockdown period and will require a disciplined but innovative management response. We hope that today’s report makes a helpful contribution to that process.'

For more information, see Minimum wage enforcement must adapt to a post-Covid labour market from gov.uk