Payslips for all workers, stricter enforcement of holiday pay and bigger financial penalties for employers who break the law are among 37 recommendations to stop the exploitation of low paid workers set out in the first annual report from the director of labour market enforcement
Sir David Metcalf’s independent strategy calls for higher financial penalties for employers who exploit their workers and pursuing more prosecutions.
Metcalf also wants the government to ensure holiday pay rules are enforced and to make it the law that employers must provide a statement of rights for employees and a payslip for all workers.
The report says leading brands should be 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.
In addition, Metcalf calls for more resources to the employment agency standards inspectorate to enforce current regulations and expanding their remit to cover umbrella companies and intermediaries.
The strategy proposes a series of local or regional pilots for licencing hand car washes and nail bars, which have been identified as sectors at risk of labour exploitation.
It also calls for action to tackle ‘phoenixing’ - the practice of directors dissolving their companies to avoid paying workers tribunal awards and other enforcement penalties.
Sir David Metcalf said: ‘This strategy sets out how we can toughen up enforcement activity to protect vulnerable workers and ensure that good, compliant firms are not undercut by unscrupulous competitors.
‘It’s important the government has the necessary powers to crack down on bad bosses who exploit and steal from their workers – that includes bigger penalties to put employers off breaking the law.’
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 (NMW) enforcement team; the gangmasters and labour abuse authority (GLAA); and the employment agency standards inspectorate (EAS).
The government has said will respond formally to the report in full later this year.
The labour market enforcement report says recent research suggests that total unpaid wages amounted to £3.1bn in 2016, of which over half was unpaid holiday pay. In addition, estimates from the sector suggest that £4.5bn is misappropriated from agency workers annually, while the overall loss to workers and HMRC is equivalent to 15% of agency industry turnover.
