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Jobs tsar: Government 'in the dark' on exploitation at work

Tom Belger
Finance and policy reporter
The UK's labour market enforcement director Matthew Taylor. (PSA)

The government is “in the dark” about the scale of worker exploitation across the UK, Britain’s employment tsar has warned.

“We are to a certain extent in the dark about the scale of these issues,” Matthew Taylor said. “We don’t know enough about what’s going on.”

Speaking exclusively to Yahoo Finance UK, he said he hoped to launch one of the most far-reaching studies on the issue later this year. “If it happens, it really will be a game-changer,” he said.

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Taylor was appointed as the government’s interim director of labour market enforcement last year, after carrying out the Taylor Review of the gig economy.

The role involves overseeing several UK agencies that enforce workers’ rights — covering everything from minimum wage payment to modern slavery cases.

His comments come as the government confirmed on Tuesday it will continue naming and shaming employers who under-pay the minimum wage, though only for sums above £500.

Thousands of firms failing to pay minimum wage

While more data is needed, official research suggests workers are particularly at risk of exploitation in sectors such as agriculture, care, construction and car washes.

Taylor told Yahoo Finance UK he wants the government to do more to educate workers on their rights, rather than focusing mainly on punishing badly behaved employers.

The former adviser to ex-prime minister Tony Blair said employment rights were “a job for society as a whole” and hopes workers can be empowered to speak up when they see violations.

The comments come after research last month suggested hundreds of thousands of people were being paid below minimum wage. A study by the Resolution Foundation think tank said calculating the exact number was “difficult if not impossible,” but estimated it was more than 350,000 people.

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In an interview in his government office in London last month, Taylor said he welcomed the research and admitted the government “need to be more proactive” in enforcing rights. The think tank’s analysis of a single month suggested HMRC caught only 1,500 out of around 11,000 underpaying firms.

However, Taylor said many were “unintentional, very small-scale breaches”, such as employers failing to immediately increase pay when minimum wage rates rise.

“People need to be aware that’s not 11,000 bosses rubbing their hands going, ‘How can I not pay poor people the minimum wage’.”

Enforcement has also improved and budgets increased, Taylor argued, saying an “awful lot more” firms would breach minimum wage law without HMRC’s investigations. Employers were fined a record £17m ($22m) in 2018-19.

‘Not just about catching bad people’

Taylor backed reforms to help workers know their rights. (PA)

Taylor noted government agencies look at an “enormously wide spectrum” of labour issues, from workers buying their own uniforms to forced labour by organised crime gangs.

“The slightly depressing thing is some of these problems have been around for quite a long time,” Taylor said.

The jobs tsar said he would welcome stronger penalties for companies that break the rules, and backed the revived naming-and-shaming scheme. However, he admitted current resources were “not commensurate with the problem,” but said they could be better used through wider reform.

Taylor, also chief executive of the RSA charity, backs current government plans to roll different enforcement teams into a new employment body. Its focus should be “not just...catching bad people doing bad things,” but also empowering workers and encouraging firms to do the right thing.

Lessons from the smoking ban

More government guidance could have an “enormous impact,” Taylor said. Officials should educate workers, firms, unions and trade bodies on common issues, such as pay entitlements for carers when traveling between jobs or security guards expected to arrive early for shifts.

His approach appears to be gaining traction. The government vowed on Tuesday to make its online advice “more accessible,” provide “thematic guidance” and even visit new firms to educate them on minimum wage law.

From April, employers will also have to give contractors a statement of their rights on day one in a reform proposed by Taylor, encouraging workers to highlight issues themselves.

Taylor also welcomed a government advertising campaign to raise awareness over holiday pay, a major issue in the UK. About 1.8 million people do not receive holiday pay owed, and a recent survey found widespread confusion over the entitlements of temporary, shift, agency and zero-hour workers.

Non-payment of holidays should be seen as “minimum wage infringement” for the lowest-paid, Taylor said, allowing HMRC’s 500-strong minimum wage enforcement team to tackle the issue.

Ultimately though, Taylor thinks public support and awareness is needed to successfully enforce workers rights.

Taylor pointed to the smoking ban, introduced in 2007 when he was part of Blair’s government. The ban worked because “everyone accepted the principle,” Taylor said.

Similarly, employment rights are “a job for society as a whole, not just for enforcement agencies.”

“I can’t ever envisage a world where there are enough people to visit every single business every single year,” he said.