British workers being cheated out of holiday pay, study finds

Employers are cheating British workers out of at least £1.5 billion a year in holiday pay to which they are legally entitled, a study has found, according to a report in The Guardian.

The report also comments on the barriers, such as tribunal and court fees, cuts in legal aid, and protection offered to employers by limited liability, that very often prevent workers recovering unpaid wages.

One in 20 workers report not being given statutory holiday pay, the study found. A further £1.2 billion of wages owed for hours worked are unpaid each year, according to a research group at Middlesex University business school.

“We’ve focused on the so-called gig economy and zero hours contracts, but the much more pervasive practices of employers who simply pocket workers’ wages have continued largely unremarked,” Nick Clark, lead researcher, was quoted as saying.

The researchers suggested that two types of cheating were prevalent. Where workers have variable hours and no pay slips, employers are able to make a significant financial gain by cheating them a little and often, and it is hard for workers to keep track of hours worked or to prove what they are owed.

A separate pattern involved bosses deferring pay on the grounds that their business was struggling and then repeatedly going into administration before workers had been paid. The researchers found many phoenix businesses being wound up with debts owed workers and HMRC but then reappearing with the same or related directors and premises under a different name.

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