Government

Leicester factory workers not reporting underpayment, LPC finds

While enforcement bodies found relatively modest non-compliance in Leicester, commissioners spoke to those who ‘believed non-compliance to be widespread and flagrant’

Workers in Leicester textile factories are reportedly “vulnerable to exploitation” and unlikely to report abuses and underpayment, according to a new report from the Low Pay Commission (LPC).

The report examined non-compliance and enforcement of the minimum wage in Leicester’s textiles manufacturers. It comes as multiple agencies have carried out large-scale joint enforcement operations in Leicester over the last two years, partly in response to “persistent” reports of exploitation and underpayment.

Low Pay commissioners heard evidence on the forces driving non-compliance and what enforcement bodies have found.

It said that “at the heart of this evidence is a disconnect”. While enforcement bodies found relatively modest non-compliance in Leicester, commissioners spoke to other bodies and individuals who “believed non-compliance to be widespread and flagrant”. 

The report found that “on the positive side”, recent changes within the textiles industry mean some evidence of underpayment may be historic and therefore less reflective of the current situation. 

However, it noted the vulnerability of workers means they “may be reluctant to provide information”. It also noted there “remains potential” for employers to conceal underpayment from investigating bodies.

Bryan Sanderson, chair of the LPC, said: “The evidence we heard from workers in Leicester was striking. Despite some positive recent progress, job insecurity, a poisonous workplace culture and low expectations leave workers trapped in poor-quality jobs and vulnerable to exploitation. These same factors mean they are unlikely to report abuses, which undermines efforts to enforce workers’ rights.

“The case of Leicester is not unique. Across the UK, workers in precarious positions face the same obstacles, with the same consequences for enforcement. The problem demands comprehensive action, including to give these workers greater security over their hours and incomes.”

In light of this, Low Pay commissioners made several recommendations for government.

It said the process for reporting abuses does not work for the most vulnerable low-paid workers, and fails to engage the third-party bodies whom workers may trust more, or wider industry networks. In light of this, commissioners recommend HMRC looks at ways to address these problems.

It added that there is an “information gap” between what industry and civil society groups think they have reported to official bodies, and what those official bodies are able to share and act on. A forthcoming official review of enforcement operations in Leicester will take into account evidence from both sides of this gap.

Finally, it said that insecure work and uncertainty over hours and incomes are central to the vulnerability of workers to exploitation, and urged the government to take action on the measures recommended by the commission in 2018 to address these issues.

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