The government’s Director of Labour Market Enforcement has published a report calling for a state agency to enforce holiday pay.

The Director, Sir David Metcalf, was appointed in January 2017 to oversee a government crackdown on exploitation in the workplace by setting the strategic priorities for the government’s three enforcement agencies:

  • HMRC’s National Minimum Wage enforcement team
  • the Gangmasters and Labour Abuse Authority
  • the Employment Agency Standards Inspectorate

The report, the first of its kind, also calls for:

  • higher financial penalties for employers who exploit their workers and for more prosecutions to be pursued
  • A law requiring employers to provide a statement of rights for employees and a payslip for all workers
  • making leading brands jointly responsible for non-compliance in their supply chains. This would be done in private but with public naming of the brand and supplier for failure to correct non-compliance
  • more resources to the Employment Agency Standards Inspectorate to enforce current regulations and expanding their remit to cover umbrella companies and intermediaries
  • locally or regionally piloting a system of licences for hand car washes and nail bars, which have been identified as sectors at risk of labour exploitation
  • measures to tackle ‘phoenixing’ - the practice of directors dissolving their companies to avoid paying workers tribunal awards and other enforcement penalties.

The report was launched as new statistics from HMRC show that its enforcement teams have doubled the number of underpaid workers for whom they have recouped money to 200,000 in 2017.

The government has said that it will respond formally to Sir David’s report later this year.

Iain Birrell of Thompsons Solicitors commented: “This report is published as the government is consulting on certain measures recommended by the recent Taylor Report. One of these was about the protection of agency staff. This report shows some of the challenges faced by the Employment Agency Standards Inspectorate who have this task.

They have just 12 FTE staff (not all of which are inspectors), but they are responsible for policing 18,000 Employment Agencies, covering 1.1m workers. How the government responds to these reports following the consultation will be a clear signal as to how seriously they take these issues.”

Visit the government website to read the report in full and to make a complaint about pay and/or work rights.