Salaried workers could be paid illegally low wages as minimum wage set to go up tomorrow
The TUC has warned that office workers and other salaried workers could be at risk of being “cheated” out of the minimum wage by their employer.
The warning comes ahead of the introduction of the new rate of the minimum wage from Monday 1 April.
A salaried worker – many of whom are office workers – is paid an annual salary which stays the same regardless of fluctuations in the hours they work. This is paid in equal payments, usually monthly or 4-weekly.
The TUC analysis shows that for an employer to be minimum wage compliant as of 1 April:
- Workers doing 35 hours per week will have to be paid at least £20,821 a year
- Workers doing 37.5 hours per week will have to be paid at least £22,308 a year
- Workers doing 40 hours per week will have to be paid at least £23,795 a year
- Workers doing 42.5 hours per week will have to be paid at least £25,282 a year
The TUC was easily able to find online adverts for salaried jobs still advertised below the incoming minimum wage in roles.
Minimum wage non-compliance is usually associated with jobs paid at an hourly rate where non-compliance is more prevalent.
The Low Pay Commission estimates that over 430,000 salaried workers are on the minimum wage or less. But as the minimum wage rises, many more salaried workers may be within scope – and will find that they are being illegally underpaid if their salaries do not rise.
Salaried jobs have almost doubled as a proportion of minimum wage jobs since 2015. LPC analysis finds that 14.6% of minimum wage jobs were salaried in 2015 compared to 28.8% in 2023.
Unpaid overtime
Even where salaries do go up, the TUC says many salaried workers could still be facing an additional risk of underpayment. This is because many will also be putting in hours of unpaid overtime. Although they might be paid the minimum wage or above for their contracted hours, their unpaid overtime could mean they are working hourly for less than the minimum wage.
UK employers claimed £26billion of free labour last year because of workers doing unpaid overtime, according to TUC analysis. The average weekly unpaid overtime is just over 7 hours.
That means a British salaried worker who is contracted 35 hours per week who does the typical amount of overtime would need to be paid £25,000 to be paid the minimum wage at an hourly rate.
The law sets out that employers must pay at least the minimum wage for all hours actually worked, even if they are in addition to the hours in the worker’s contract.
The TUC warns desk-based office workers are often expected to put in hours of overtime as part of their job.
Underpayment in the first month
The TUC has today warned April will likely see more than a quarter of a million workers paid less than the minimum wage this month, as the new rate of the minimum wage comes into force.
The union body says the significant scale of underpayment when a new rate comes in underlines the “urgent need for investment in our enforcement system”.
TUC General Secretary Paul Nowak said: “The minimum wage is the very least employers should pay their workers. It’s their legal duty.
“But too many workers are cheated out of pay by bad bosses, who choose to pay staff illegally low rates.
“Minimum wage cheats exploit workers from a range of jobs – and desk-based office jobs are no exception.
“And to make matters worse, many desk-based workers are expected to put in hours of overtime for free. That’s not right.
“It’s time for a New Deal for Working People – like Labour is proposing – which will deliver a real living wage, boost wages across the board and beef up our enforcement system so that bad bosses can’t get away with failing to pay their staff the minimum wage.”