In Brief

CLAIM: In 2015, nearly 1% of employees were not paid minimum wage.

CONCLUSION: This claim can be substantiated by numerous government surveys and reports. There has been further investigation by organisations in the United Kingdom to determine who is most affected, the causes behind non-compliance, and solutions for the problem.

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"Minimum Wage?!" (RSCLS Street Art Collective) by Denis Bocquet is licensed under CC BY 2.0

In their 2016 Assembly Election Manifesto, the SDLP claims that in 2015 nearly 1% of people in Northern Ireland earned less than the National Minimum Wage (NMW). This statistic can be found in a press release published by the Department of Enterprise, Trade and Investment (DETI) on 18 November 2015, where they state that “0.9% of jobs were paid below the National Minimum Wage in 2015.” This rate is relatively on par with the rest of the UK, where that rate stood at 0.8% that year.

Who does the NMW apply to?

First of all, it is important to note that the same NMW does not apply to everyone. The deciding factor is age, with those over 21, between 18 – 21, and 16 – 17 having a guaranteed wage of £6.70, £5.30, and £3.87 per hour respectively. Apprentices under 19, or over 19 but in the first year of their program, are only guaranteed £3.30 per hour. There are many who remain exempt, particularly those who are self-employed, or are the directors of a company. People living and working in a religious community, share fishermen, and prisoners are among the other categories of individuals who do not fall under the NMW regulations.

Thus, the claim only applies to those who earn below the allocated amount for their age group due to non-compliance on the part of the employer.

Why are some jobs paying less than the NMW?

In 2013, the Trades Union Congress produced a series of recommendations for battling NMW non-compliance. They cited the under-recording of work hours, labelling employees as self-employed, and hiring of ‘interns’ or ‘volunteers’ as some of the most common methods of avoiding the NMW. Despite improvements in the enforcement of NMW laws, there are still shortcomings when it comes to protecting the most vulnerable.

In February of 2013, the National Institute of Economic and Social Research (NIESR) conducted an investigation. When using the Annual Survey of Hours and Earnings data, the rate of non-compliance across the United Kingdom remained relatively steady between 2002 and 2011, while Labor Force Survey data showed a slight increase in non-compliance over the same time period.

The NIESR report concluded that women and younger workers are most likely to be underpaid. Apprentices have been singled out as the biggest single group that is most at risk, and consequently is in the greatest need of protection.