Citizens Advice Scotland has welcomed the UK government’s decision to increase the minimum wage to £6.50 an hour – and has called on them to under-score the decision by introducing a Fair Employment Commission.
CAS Chief Executive Margaret Lynch has written to the Chancellor today to make the call. (Letter attached).
Publishing the letter, Margaret Lynch says:
“In our recent discussions with Ministers we have argued that there are two major things the government can do to help low-paid workers. An increase in the Minimum Wage is one. The other is the establishment of a Fair Employment Commission to better enforce workers rights on pay and other issues. Today the government have announced the first of these changes. We urge them now to implement the second.
“CAB advisers see so many people now who are in poverty, or very near it. Many of them are unemployed, but others are actually in work, and are struggling because of low wages and uncertain hours – applied by rogue employers. These people need better protection and a fair deal.
“The government says it wants to make work pay. We support that aim, and having secured a fairer Minimum Wage, the best way they can ensure that work pays is to create a powerful Fair Employment Commission now.”
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The CAS letter to the Chancellor is attached, along with a briefing sheet outlining why a Fair Employment Commission is necessary. The briefing includes the following extract:
Tacking Rogue Employers – Towards a Fair Employment Commission
It is a criminal offence for employers not to pay someone the National Minimum Wage or to falsify payment records. HM Revenue and Customs (HMRC) has responsibility for enforcement of the NMW. In 2012, CAS published ‘Fair Employment – Why Scotland’s workers need a Fair Employment Commission’ reporting on CAB clients who had been systematically underpaid for the hours they worked and a number of employers failing to pay their staff the NMW, with young people and migrant workers particularly affected by this practice. Two years on our cases show that little has changed. This must be addressed.
Whilst in 2012/2013 HMRC identified 736 employers who had failed to pay the national minimum wage which led to £3.9 million in unpaid wages being recovered, challenging poor employment practices is far from easy for many workers. In many cases, clients are well aware of their entitlements but are unable to enforce them.
The following cases have been reported by bureaux in the last three months and highlight how workers who are aware of their right to the NMW are often unable to enforce this rights.
- An East of Scotland CAB reports of a client who works 16 hours per week for a dry cleaning firm. She is 32 years old but is only earning £6.21 per hour. She has no contract of employment. She has mentioned to her employer that she is not earning the minimum wage but at the moment does not want to cause any issues with her employer as she needs the job.
- A West of Scotland CAB reports of a client who works for a hairdresser. The client is 23 years old and started work for her employer three years ago on £2.68 per hour. She is still receiving this rate per hour and has asked for a rise in wages for some time, but feels she has been fobbed off. [At time of starting she should have earned at least £4.92 and should now be on £6.31]
- An East of Scotland CAB reports of a client in her early twenties who works for a cleaning company between six and 14 hours per week. Although her wage slips from her boss’s accountant state that she earns the National Minimum Wage, in reality she is paid £6 per hour in cash.
Citizens Advice Scotland recommends in the short term the UK Government:
- Runs an awareness-raising campaign to ensure workers know that they are entitled to a National Minimum Wage and how to claim it
- Takes a proactive approach to targeting employers who do not pay their staff the National Minimum Wage
In the longer term, the UK Government:
- Create a ‘Fair Employment Commission’ with the legal powers and resources both to secure individual vulnerable workers their rights in all areas of employment (including pay), and to root out rogue employers.
It is in the interest of good employers, workers, and the wider economy, that rogue employers are prevented from exploiting vulnerable employees. However, the current systems and penalties in place for the enforcement of the National Minimum Wage are not ensuring that all workers are paid what they are legally entitled to.
Citizens Advice Scotland believes that a Fair Employment Commission with real teeth could both ensure employers are aware of their responsibilities and employees.