371,000 workers underpaid, report finds

An estimated 371,000 workers were underpaid in April 2024, a new report from the Low Pay Commission (LPC) has found.

The LPC, which advises the government on setting minimum wages, looked at the scale of underpayment over the last decade, while suggesting ways for the government to tackle it.

The scale of underpayment

Evidence collected over the last decade suggests:

• Underpayment lasts a long time.
• One in three underpaid workers continue to be underpaid, year after year.
• A tight labour market has allowed some workers to find better-paying jobs, but this trend is slowing.
• Employees are more likely to remain underpaid if they stay in the same job.

In April 2024:

• 344,000 national living wage jobs were underpaid.
• 140,000 workers over the age of 21 were underpaid by more than 50p per hour.
• A similar number were paid within 10p of the national living wage.

Who is affected by underpayment?

The report shows that:

• Underpaid workers in non-low-paying sectors have risen by nearly 40% since 2019.
• Salaried and full-time workers are most likely be underpaid (around 186,000 salaried workers compared to 158,000 hourly-paid employees).
• Salaried workers are more likely to work extra unpaid hours outside of their contracted hours.
• Most workers who are underpaid by more than £1 an hour are salaried.
• Most underpaid employees work in the private sector.
• Migrant workers are particularly vulnerable because they risk losing their visa sponsor if their employer is sanctioned.

Which sectors are more likely to be underpaid?

The report found that the three sectors with the highest rates of underpayment were:

• education
• childcare
• office work

The social care sector saw the largest rise in underpayment.

Challenges faced by workers

More than one in three workers are affected by:

• deductions
• unpaid working time

Workers often feel trapped in underpaid jobs for several reasons, including:

• risk to employment rights
• insecurity over the number of guaranteed hours in a new job
• transport

Slow enforcement

Investigations into underpayments also seem to take a while to resolve, frustrating both workers and their employers:

• The average HM Revenue and Customs (HMRC) investigation takes between 4-8 months.
• Most (91%) cases were completed within 360 days in 2022/23.

Low paid workers especially feel their complaints aren’t resolved quickly.

Recommendations for improvement

The LPC's report offers several important suggestions for the government, including:

• better guidance on job types and how to calculate working hours
• make sure employees understand how to report underpayment
• encourage more union involvement in enforcing rules
• improve how HMRC deals with complaints and feedback from others

How to check your wage 

You can use the minimum wage calculator to find out if you're being paid the correct national minimum wage or national living wage. 

Or read our guide to find out what to do if you think you’ve been underpaid.