We received nearly five hundred written submissions, and took oral evidence from a wide range of representative organisations. And we undertook a substantial programme of visits to over sixty cities, towns and villages throughout the UK, where we heard directly from small firms, rural businesses, local outlets of national companies, low-paid workers, the unemployed, and some operating on the fringes of the formal economy. This has led to a substantial degree of in-work poverty and dependence on social security benefits to supplement low wages. 5 Low pay is more prevalent among certain groups of individuals, especially women and young people. It is closely associated with particular working patterns, such as part-time work and homeworking.
Low pay is found in all regions.
To define which components of pay could be taken into account in the National Minimum Wage, we considered various pay systems across business sectors. The definition should be simple and fair, easy to comply with and straightforward to enforce. Payments based on output, productivity or performance should count towards the National Minimum Wage, including, for example, payment by results, commission, bonuses, and tips and gratuities paid through the payroll. In whatever way workers' pay is defined or whatever hours they work, only pay for 'standard' working should count. Hence employers cannot satisfy their obligation to pay the National Minimum Wage by including benefits and premium payments, such as overtime and shift premia.