Asked by: Alex Cunningham (Labour - Stockton North)
Question
To ask the Secretary of State for Business, Innovation and Skills, which sectors of the economy he estimates to have the lowest compliance with national minimum wage legislation.
Answered by Jo Swinson
The main estimate of non-compliance used is from the Annual Survey of Hours and Earnings (ASHE)[1]. The table below shows the proportion of jobs held by those aged 22 and over, paid below the full adult national minimum wage (NMW) (at the time of the ASHE survey) by sector. It is reproduced from the latest Low Pay Commission report[2].
This is a proxy measure for non-compliance as these figures include people who for legitimate reasons are paid less than the adult NMW for example because they are on the apprentice NMW rate or are living in accommodation provided by their employer. The ASHE survey is based on a sample of employee jobs drawn from HMRC’s Pay-As-You-Earn income tax records and consequently it does not include all workers who earn below the Lower Earnings Limit. These two factors tend to offset each other but we do not know definitively how large the combined effect is. However, we believe that it is small.
Proportion of jobs held by those aged 22 and over, paid below the national minimum wage by sector, UK, 2012-13
Sectors | Paid below 2013 April NMW rate (£6.19) |
Hairdressing | 3.5 |
Childcare | 2.8 |
Hospitality | 2.5 |
Cleaning | 2.4 |
Leisure, travel & sport | 1.4 |
Retail | 1.3 |
Transport | 1.3 |
Agriculture | 1.2 |
Storage | 0.9 |
Social care | 0.8 |
Textiles & clothing | 0.8 |
Office work | 0.8 |
Employment agencies | 0.7 |
Food processing | 0.6 |
Non-food Processing | 0.4 |
Whole economy | 0.8 |
[1] ASHE is a survey of employees completed by employers which we can use to look at workers earning at or below the NMW rate.