Tougher action is needed to enforce the national minimum wage and tackle rogue employers who refuse to pay the statutory rate, a new report has urged.
Think tank Centre for London and charity Trust for London said only a handful of employers across the UK have ever been prosecuted for paying below the minimum wage even though more than 300,000 workers earn less than the legal hourly rate.
The groups said local authorities should be given greater powers to tackle non-compliance, while fines should be higher.
A high-profile policy of naming and shaming firms found to be paying below the minimum wage rates should be introduced, said the report, which also called for the banning of adverts for unpaid internships.
Andy Hull, the report's author, said: "The minimum wage has changed millions of lives for the better, yet too many workers get paid below it."
TUC general secretary Frances O'Grady said: "There must be no hiding place for employers who try to cheat workers out of a legal wage and bosses who avoid paying the minimum wage should face prosecution, naming and shaming, as well as tough financial penalties.
"Whilst hard-pressed HM Revenue and Customs staff regularly recover more than £3 million a year for workers on illegal poverty pay, it is clear that far too many unscrupulous bosses are still getting away with ignoring the minimum wage. This means that around 300,000 workers across the UK are not being paid what they should be."
A Department for Business spokesman said: "Paying less than the national minimum wage is illegal. If employers break the law, Government will take tough action.
"HMRC investigates every complaint made through the free and confidential pay and work rights helpline and since October any employers who fail to pay NMW will be publicly named and shamed under a revamped scheme to make it easier to crackdown on rogue businesses.
"This is on top of financial penalties which employers already face if they fail to pay NMW. The Government recently announced that we will increase this to £20,000 for every underpaid worker - more than four times the fine today."
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