Labour & European Law Review Weekly Issue 418 06 May 2015
Zero-hours contracts are just the tip of the iceberg when it comes to low-paid and insecure jobs, according to new analysis published last week by the TUC.
The analysis shows that in addition to the 700,000 UK workers who report being on zero-hours contracts, there are another 820,000 employees who report being underemployed on contracts offering up to 19 hours a week.
The TUC found that these workers are typically paid a much lower rate than other employees - an average of £8.40 an hour, compared to £13.20 an hour for all employees.
Women are particularly at risk of becoming trapped on short-hour contracts, according to the TUC, accounting for nearly three-quarters (71.5 per cent) of underemployed employees.
Retail is the worst affected sector. Nearly a third (29 per cent) of underemployed short-hour workers work in supermarkets, shops, warehouses and garages – nearly 250,000 people. Education (16 per cent), accommodation and food services (14 per cent) and health and social care (12 per cent) also account for large shares.
These short-hours contracts, which can guarantee as little as one hour a week, mean that some employers get out of paying national insurance (NI) contributions. This is because the 2014 to 2015 Weekly Secondary Threshold (the point at which employers start paying NI) is currently £153. So if the average hourly rate for underemployed short-hours workers is £8.40, they would have to work 18.2 hours a week before the employer has to start paying.
Overall, the result of this growth in low-paid, insecure jobs since the crash has been bad for workers and the public finances, says the TUC, with taxpayers having to subsidise poverty pay through tax credits.
Neil Todd, from Thompsons Solicitors, commented: “Whilst the government will continue to assert unemployment figures are falling this research shows the type of work many are forced to undertake. For those trapped in these low paid jobs with no guarantee of work going forward there has been no economic recovery to cheer. We need a government committed not just to creating jobs but to creating jobs that afford individual workers the dignity they deserve. This will only come with a Labour victory.”