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April 2016
Towards a typology of non-payment summary
A paper proposing a typology of non-payment of wages has been prepared for discussion at a workshop on 9th May. This typology (following revision as a result of the workshop) will be used to help us pick case studies for the next stage of our research.
The full paper outlines categories which have been produced by other authors (including state regulators), and discusses factors considered to have potential relevance to for the construction of the typology. It also includes a brief summary of the Unpaid Britain project, followed by a discussion of the existing data on non-payment.
The proposed typology of non-payment
Taking into account the various discussions and caveats that are outlined in the above working paper, we find there are four key dimensions to unpaid wages:
Consent; Intent; Means & Magnitude
Means (the way the wages have not been paid) and Magnitude (the size of the sum involved relative to normal earnings) are clearly important. They might determine whether restitution by the worker is pursued, the route by which this occurs, whether there is a role for regulators, and the impact of non-payment. But they are descriptive and determined by the circumstances and intent of the employer, and the degree to which workers’ consent may be given.
Non-payment might occur when imposed by circumstances (absence of funds, or catastrophic failure of payment system for example), or as a result of error (data recording mistake), or misinterpretation (misinterpretation of minimum wage regulations etc.)
These are distinct from circumstances where there has either been a decision not to pay, or one (even by default) not to rectify systemic problems which result in non-payment. Interviews suggested strongly that plausible deniability was common, but difficult to detect in official and administrative statistics, because it is feasible to rectify any loss in individual cases without disrupting the model or incurring penalties. This differs from the construction industry “knocking” (complete failure to pay outstanding wages) or deliberate insolvency associated with phoenix companies, in that those are detectable, and (in theory at least) subject to penalties and thus less sustainable as a business model. This could also apply to extreme examples such as forced labour or criminal extortion. These are evident non-payments.
Consent is not a relevant consideration when non-payment is imposed by circumstances, or where there is an error or misunderstanding, but is of significance for purposeful non-payment. The proposed typology separates informed consent, which includes some unlawful, but voluntary contracts and agreed delays to payment, from without consent which would include all other categories (such as not receiving entitlements of which the worker was unaware, as well as the more blatant unauthorised deductions of which they were fully aware).
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