Union calls for an end to minimum wage loophole

70,000 production staff underpaid by rogue bosses - TGWU

The government should move quickly to close a legal loophole which allows unscrupulous employers to pay their workers less than the national minimum wage, according to the Transport and General Workers’ Union (TGWU).

The TGWU claimed that 70,000 UK workers were being paid less than £4.50 an hour because their bosses were exploiting a system which pays staff for the amount of work done over a certain period of time.

The Fair Estimate Agreement governs employees in the textile, agricultural and home working sectors and pays a worker a wage based on the number of items he or she has produced.

An estimate is made of how many items a worker can produce over a certain period and an employee has to make four-fifths of this estimate to meet their wage conditions.

Although this system was designed to ensure slower workers do not fall back below four-fifths of everyone else, the TGWU said that some employers are using the regulations to pay just four-fifths of the minimum wage.

The union urged the government to close the loophole and ensure that every employee earns at least the minimum wage.

As reported by Startups.co.uk, the government has threatened to come down hard on employers who fail to meet minimum wage requirements, with an estimated £3.5 million recovered from rogue bosses last year alone.

Although the minimum wage has been accepted by the majority of businesses, there is likely to be problems for some small firms when basic pay rises to £4.85 an hour in October, less than a year after the latest increase.

Diana Holland, of the TGWU, said that 70,000 mainly women workers are being cheated out of their rightful, legal minimum pay by exploitative employers.

“The government must act now to close this loophole and ensure that everyone is getting the fair pay set out in law.

“The assessments of work must be reasonable and properly conducted, with fair estimates of worker speed and realistic expectations.

“New regulations must be watertight so that bad employers cannot find new ways to underpay workers,” she said.

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