A landmark study led by researchers at University College London (UCL) has revealed that breaches of employment law are not isolated incidents, but rather a widespread pattern affecting millions of workers across all sectors in the UK.
The comprehensive report, published by the newly established Fair Work Agency (FWA) and commissioned by the former Office of the Director of Labour Market Enforcement, found that at least 14% (one in seven) of UK employees have experienced a clear violation of basic employment rights within the last two years.
The Scale of the Violations
According to the findings, at least 5.4 million workers faced legal breaches. These include being paid less than the National Minimum Wage, being charged illicit work-finding fees by recruitment agencies, or being denied legally required documents such as payslips, employment contracts, or key information documents.
The research highlights that these violations disproportionately impact the most vulnerable. The rate of clear legal violations jumps to more than one in four (25.6%) for “precarious workers.” This group is defined as individuals facing a combination of vulnerabilities, such as low income, non-traditional employment, or those coming from an immigrant and/or ethnic minority background in a small workplace.
Dr Krisztián Pósch, project co-lead from UCL Security and Crime Science, noted: “These issues are not limited to a select group of vulnerable workers. Our study shows that huge numbers of people across the UK are having their employment rights violated, and even more are being harmed in other ways at their workplace.”
Broader Workplace Harms
Beyond clear legal violations, the study found that 70% of the workforce – approximately 26.6 to 28.7 million people – experienced at least one of a broader range of potentially illegal or harmful practices.
The survey of over 4,000 UK workers uncovered several key areas of concern:
- National Minimum Wage Shortfalls: At least 6.1% of the full workforce and 14.9% of precarious workers were paid below the National Minimum Wage. Underpaid workers in the broader workforce lost £1,217 annually on average, while precarious workers lost £858.
- Unpaid Extra Work: Affecting 31.8% of the general workforce and 28.2% of precarious workers. Those in the full workforce typically worked six unpaid hours for every 100 paid hours, rising to eight unpaid hours for precarious workers.
- Mental Health and Wellbeing: The most common issue reported was the negative mental health impact of work, affecting 37.5% of the full workforce and 22.1% of precarious workers.
- Other Practices: Employees also reported facing physical workplace injuries, unfair wage deductions, leave-related difficulties, and workplace bullying and harassment.
Interviews indicated these issues are frequently driven by systemic pressures such as understaffing, intense business demands, and employees either lacking knowledge of their rights or the confidence to exercise them.
Compliance Gaps and SME Risks
While some violations are deliberate, many stem from informal practices or a lack of robust human resources (HR) While some violations are deliberate, many stem from informal practices or a lack of robust human resources (HR) systems, particularly within Small and Medium-sized Enterprises (SMEs).
Common risk areas for SMEs include relying on informal agreements rather than written contracts, miscalculating holiday pay, setting up incorrect payroll for part-time staff, and general lack of documentation. Worryingly, 36% of SMEs report having never heard of the Fair Work Agency.
With single claims in employment tribunals increasing by 33% year-on-year, and the Government routinely publicly naming and shaming employers for underpaying staff, small businesses risk severe financial penalties, enforcement action, and reputational damage, even if violations are unintentional.
Enforcement and Recommendations
The Fair Work Agency was officially launched last month to uphold new employment law reforms under the Employment Rights Act 2025. Its remit includes investigating breaches regarding the National Minimum Wage, holiday pay, and statutory sick pay.
The UCL report outlines several recommendations aimed at the government, trade unions, and businesses. These include raising the visibility of the FWA, improving multilingual communications about workers’ rights, creating safer reporting mechanisms for abuses (with specific safeguards for migrant workers), and proactive workplace inspections.
To prepare for increased enforcement and avoid costly tribunals, businesses are advised to:
- Familiarise themselves with the FWA: Understand the agency’s powers and the penalties for non-compliance.
- Audit HR and Payroll: Review current processes to ensure accuracy in pay, holiday entitlement, and statutory obligations.
- Update Documentation: Ensure contracts and onboarding materials clearly and accurately reflect pay terms, hours, and statutory rights.
- Improve Communication: Provide employee handbooks, workshops, and safe, reprisal-free channels for workers to report concerns. Seeking advice from external HR professionals or accountants is highly recommended for businesses without an in-house team.
