Social care workers are losing out on £130 million a year due to pay rates that are in breach of the National Minimum Wage, according to analysis by the independent think-tank the Resolution Foundation.

The analysis estimates that around 160,000 care workers (out of 1.4 million) are being paid less than the minimum wage when all working time is considered. The average loss for those not receiving the minimum wage is around £815 per year.

Dubbed ‘wage theft’, the think-tank believes this pay gap is primarily down to the failure of employers to pay staff at a level that adequately covers all of their working time. This includes time spent travelling between clients for domiciliary care workers, many of whom will have to make a number of journeys between clients each day. It’s also due to unpaid training time and ‘on call’ time.

According to the researchers, the social care workforce displays many of the characteristics normally associated with low pay: almost two in five staff work part-time, more than four in five are women, and a growing number of its workforce are migrants. There is also a high prevalence of zero-hours contracts, and weak collective bargaining power for better pay and conditions.

Laura Gardiner, Senior Research and Policy Analyst at the Resolution Foundation, said: “Diminishing public funding and ever tighter commissioning practices are placing great pressure on care providers, but there is simply no excuse for breaking the law and HMRC urgently needs to get tougher on employers who do so. It’s welcome that the government has started to draw attention to this issue and beefed up enforcement powers but far more needs to be done given the scale of abuse.”

She added: “As well as helping to attract and retain staff and boosting the incomes of low-paid workers, better pay would ultimately lead to improvements in care quality. If we want to see dignity for those receiving care then we need to start investing in the workers who provide it.”