openDemocracyUK: News

Big Tech firms paying below minimum wage left off UK government’s name-and-shame list

Deliveroo, Uber and Amazon were excluded because couriers are classed as self-employed, but legal experts say drivers can’t challenge low pay themselves

Adam Bychawski
6 August 2021, 3.12pm
Some Deliveroo riders have reportedly earned as little as £2 an hour.
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Clare Jackson / Alamy Stock Photo, all rights reserved.

The UK government has been criticised for failing to take action against Big Tech companies who pay less than the minimum wage.

In a list released on Thursday, the Department for Business, Energy and Industrial Strategy ‘named and shamed’ almost 200 companies for breaching minimum wage laws between 2011 and 2018. 

The companies on the list, which included national retail chains John Lewis and Pret A Manger, owed a total of £2.1m to more than 34,000 workers. They had also been fined an additional £3.2m over a seven-year period.

But tech giants, including Uber, Deliveroo and Amazon, all of which have paid their drivers less than the minimum wage, were not included on the list. This has consistently been the case since the government’s naming-and-shaming list was first published in 2013.

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One in three Deliveroo workers was found to be earning less than the minimum wage, according to an analysis of thousands of rider invoices by the Bureau of Investigative Journalism earlier this year. Some riders earned as little as £2 per hour. In 2019, Deliveroo said its riders are paid more than £10 an hour on average.

Companies such as Deliveroo are not breaking the law because their riders are classed as self-employed and for this reason do not have the rights to a minimum wage and holiday pay that people designated employees or workers enjoy.

Amazon has similarly been accused of using this loophole, after some of its self-employed delivery drivers were found to be earning below the minimum wage. 

Sub-contractors working for the tech giant told the Daily Mirror earlier this year that their pay was as low as £1.80 an hour after van hire, fuel and other deductions. The whistleblowers said they were expected to deliver up to 250 parcels a shift and were docked pay for each one they failed to deliver. 

At the time, Amazon told the Mirror that there was a 24/7 hotline for drivers to make complaints and the firm was “committed to ensuring people contracted by our independent delivery providers are fairly compensated and are treated with respect”.

In March, a landmark court ruling forced Uber to end the practice of treating its drivers as self-employed and offer them employee benefits including paid holiday and pensions, as well as paying them minimum wage.

Uber's chief executive Dara Khosrowshahi said at the time that the company would start giving workers an earnings guarantee. “I know many observers won't pat us on the back for taking this step, which comes after a five-year legal battle. They have a point, though I hope the path that we chose shows our willingness to change,” he said.

However, legal experts have accused Uber of ignoring the supreme court ruling by paying minimum wage only when riders accept a trip, rather than the whole duration of their shift. “Drivers should be paid for the time that they're logged in as much as they are paid for the time when they're driving,” Kate Robinson, an employment solicitor at legal firm Leigh Day, who acted on behalf of Uber drivers, told openDemocracy. 

Up to a third of the time drivers are behind the wheel can be spent waiting for customers, according to US studies

“The government has named and shamed itself by leaving out big violators of the minimum wage like Uber,” Nader Awaad, the private hire drivers chair of the Independent Workers' Union of Great Britain, told openDemocracy. 

“Even before this farce, the burden was already on workers to enforce their own rights. If the government does not radically overhaul its enforcement regime, more companies will take the risk and precarious workers will continue to pay the price,” Awaad, who is an Uber driver, added.

Smaller companies, including handyman app Taskrabbit and Uber rival Bolt, have also been found to pay less than the minimum wage. An Oxford University report on 11 of the UK’s biggest gig-work platforms found only two had provided evidence that their workers were guaranteed to take home more than the minimum wage.

Employment lawyers said that individuals are expected to enforce the minimum wage themselves, but may not realise that companies are exploiting them by classifying them as self-employed rather than as a worker.  

“If you are someone who is classified by a company as a self-employed contractor, it's very difficult to challenge that and say, ‘Actually, I work in a way that means that I should be paid the national minimum wage,’” said Robinson.

“The only way that people can do that is through bringing a claim in the employment tribunal, which is expensive and time-consuming. And so what happens is you do have a situation where people may very well be working in line with the way that an employee works but are classified as self-employed contractors,” she added.

The number of employers on the government’s list is only a fraction of those who have underpaid their workers. The Low Pay Commission estimates that between 300,000 and 580,000 people are short-changed every year. HM Revenue and Customs, which is responsible for investigating violations of minimum wage law, was able to return unpaid wages to only 155,000 workers last year. 

Just six employers have been prosecuted for paying employees less than the minimum wage in the past six years, despite tax authorities finding more than 6,500 violations.

The Department for Business, Energy and Industrial Strategy was approached for comment on their ‘name and shame’ policy but referred openDemocracy to HMRC.  

A HMRC spokesperson said: “All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. We won’t hesitate to act to ensure that workers receive what they are legally entitled to. Anyone not being paid what they are entitled to can complain online. If they want to speak with someone they can phone the Acas Pay and Work Rights Helpline on 0300 123 1100, who may transfer the call to HMRC.”

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