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Unemployment Falls but Wage Inequality Rises Reports HR Magazine
May 16, 2019
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While UK unemployment hits another record low, the TUC warns of wage inequality between sector

UK unemployment dropped to 3.8% in the first quarter of 2019, marking the lowest rate since 1974, according to the latest labour market statistics published by the Office for National Statistics (ONS).

However, trade union the TUC has warned that wages and productivity remain low and wage inequality is on the rise. Its analysis of the latest ONS data found that wages in most sectors are still worth less than before the financial crisis, and overall real wages are still £17 a week lower than a decade ago.

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Measures to Tackle Exploitation of Low Paid Workers

The government’s Director of Labour Market Enforcement has today (9th May 2018) set out 37 recommendations to help stop the exploitation of the UK lowest paid workers.

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  • Director of Labour Market Enforcement calls for holiday pay to be enforced and payslips for all workers
  • New independent report includes recommendations for bigger financial penalties for employers who break the law and tougher enforcement of rights for agency workers
  • Sir David Metcalf calls for big companies to share responsibility for wrongdoing in the supply chain, including naming firms whose suppliers break employment law
  • HMRC stats out today show its enforcement team helped 200,000 workers get pay owed to them

Sir David Metcalf’s independent strategy published today (Wednesday 9 May 2018) includes recommendations on:

  • Higher financial penalties for employers who exploit their workers and pursuing more prosecutions
  • Enforcing holiday pay and making it the law that employers must provide a statement of rights for employees and a payslip for all workers
  • Making leading brands jointly responsible for non-compliance in their supply chains. This would be done in private but with public naming of the brand and supplier for failure to correct non-compliance
  • More resources to the Employment Agency Standards Inspectorate to enforce current regulations and expanding their remit to cover umbrella companies and intermediaries
  • Locally or regionally piloting licencing of hand car washes and nail bars, which have been identified as sectors at risk of labour exploitation
  • Tackling ‘phoenixing’ – the practice of directors dissolving their companies to avoid paying workers tribunal awards and other enforcement penalties

The report is launched as new HMRC stats show that its enforcement teams have doubled the number of underpaid workers they have recouped money for to 200,000 in 2017.

Sir David Metcalf said:

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