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One in seven UK restaurant and hotel staff receive no paid holiday

Tom Belger
Finance and policy reporter
Workers in the hotel and restaurant sector are most likely not to receive their legal minimum entitlements at work. Photo: PA

One in seven UK restaurant and hotel workers say they receive no paid holiday, according to new analysis of official figures.

Millions of British workers miss out on basic legal rights at work such as the minimum wage, holiday entitlement and payslips, according to the Resolution Foundation.

The think tank said violations of employment rights “remain far too common” as it revealed new research based on data from the Office for National Statistics (ONS)’ labour market survey.

It called on the government to “step up” to ensure rules are enforced.

It welcomed plans for more joined-up labour market regulation through a single body to enforce employment rights, which were set out in a recent government consultation paper. But it warned the new body must be “properly resourced” and have “legal teeth.”

The workers most likely not to receive their legal rights

It found one in 20 workers across the UK said their employer did not give them any paid holiday, with workers in the hotel and restaurant sector most likely not to receive their legal minimum entitlements at work.

Hotel and restaurant staff are also 50% more likely than other workers not to even receive a payslip officially stating their earnings.

More than 45% of workers on zero-hours contracts and about 40% of workers on temporary contracts also said they received no paid holiday.

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Workers in smaller firms are also more likely to miss out on paid holiday entitlements.

Last year saw a record 200,000 cases of workers found by HMRC to be receiving below the legal minimum wage, the think tank said in its latest report.

Workers under 26 are almost twice as likely to be paid below the minimum wage as other age groups.

Workers who most need redress are the least likely to seek it

200,000 workers were founded to not receive even the minimum wage last year. Photo: PA

The Resolution Foundation said Britain still largely “relies on individuals to hold non-compliant firms to account,” with workers in many sectors expected to take issues to employment tribunals rather than enforcement such as inspections.

But the think tank warned: “Those workers who are most likely to require redress through the ET system are the least likely to use it.

“Young people are disproportionately likely to be subject to unlawful working practises, but make far fewer applications than any other age group.”

By contrast it said managers were the least likely to be subject to labour market violations, but were among the most likely to make tribunal claims.

How the UK tackles exploitative employers

Lindsay Judge, senior economic analyst at the Resolution Foundation, said: “The UK has a multitude of rules to govern its labour market – from maximum hours to minimum pay. But these rules can only become a reality if they are properly enforced.”

David Metcalfe, who led the UK government’s labour market enforcement work until recently and is advising the think tank, warned in 2014 that a typical employer could expect a minimum wage inspection every 250 years and a prosecution “once in a million years.”

Judge said the government should prioritise investigations into the hotel and restaurant sector and focus on workers on insecure contracts.

She welcomed the government’s plans for a single enforcement agency, uniting previously separate bodies, leaving officials “better placed to tackle these labour market violations” if properly resourced.

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Judge also said extra funding and powers for HMRC and the revamped Gangmasters and Labour Abuse Agency to crack down on exploitation in recent years were further “welcome steps.”

Official documents say the government spends £33m a year on enforcing employment rights, through checking minimum wage law compliance, licensing firms in sectors where exploitation is rife and regulating employment agencies.

The government has also committed to extend enforcement of holiday pay rights for vulnerable workers, as well as support firms to comply with the rules.

A spokeswoman for the department for business, energy and industrial strategy said: “We are the first country in the world to look at improving protections for workers to ensure they keep pace with modern working practices, including paid leave.

“That’s why we are extending state enforcement to cover holiday pay for vulnerable workers, as part of the largest upgrade to workers’ rights in a generation.”