More than £3 billion of British workers’ wages and holiday pay is withheld by employers every year, affecting at least two million employees, according to a report by Middlesex University London. 

The ‘Unpaid Britain: wage default in the British labour market’ report, compiled by research teams at the university, reviewed employment tribunal judgement data, Labour Force and Family Resource surveys, and individual case studies. It discovered that approximately £1.3 billion in wages and £1.8 million in holiday pay goes unpaid to workers each year. 

"This research highlights the serious matter of unscrupulous employers taking advantage of British workers, many of whom are already struggling. It’s appalling that in this day and age, workers are not being paid for work."

Jo Seery
professional support lawyer at Thompsons Solicitors

While many responsible employers have mechanisms in place to avoid underpaying staff, the report states that some companies use a number of methods to withhold employee wages, such as: 

  • ‘losing’ a few hours’ worth of workers’ money each week
  • withholding holiday pay
  • disputing the interpretation of an employee’s contract
  • charging workers for items necessary for their job
  • dissolving a company which owes wages to then start afresh.
     

The report was launched at an event in London chaired by Jo Seery, a professional support lawyer for employment rights specialists, Thompsons Solicitors, with representatives and key speakers from Unite the union and the CBI in attendance.

Commenting on the report, Jo Seery said: “This research highlights the serious matter of unscrupulous employers taking advantage of British workers, many of whom are already struggling. It’s appalling that in this day and age, workers are not being paid for work.” 

According to the research, employers are rarely penalised if caught and, even when they are, the sanctions are too weak. To tackle this, key recommendations provided in the report include: making HMRC responsible for paying workers identified in national minimum wage arrears and then collecting the funds from the employer, the introduction of penalties against employers who fail to provide paid holidays or payslips and tougher sanctions against businesses that deliberately fail to pay staff. 

“The government must tackle this head-on,” Jo added. “Too many workers are being taken advantage of by companies who, quite frankly, should know better than to cut corners to boost their profits. Thompsons Solicitors has worked extensively with UK trade unions on employment rights issues, such as unfair pay, helping tens of thousands of workers achieve justice after falling victim to the actions of dishonest employers, and we know that more must be done to ensure businesses that repeatedly take advantage of innocent workers are punished. 

“I was honoured to chair the launch of the report and hope that it can rouse significant change in how workers are treated in the UK. However, until the government takes action to ensure repeat offending businesses are held accountable for flouting their obligation to workers, we can only assume more will suffer.”   

Click to read the full report.