Almost 10% of UK employees are not receiving payslips, while one in 20 are missing out on their legal holiday entitlement, according to think tank the Resolution Foundation.
The Resolution Foundation's analysis into UK labour market violations has been released to mark a three-year study into enforcement. Last year, HMRC identified a record 200,000 cases of workers not receiving the National Minimum Wage (NMW).
In addition, the Resolution Foundation says a quarter of those earning within 5p of the minimum wage are paid less than the legal minimum. Meanwhile, the research revealed that one in ten workers do not receive a payslip, making it hard for them to calculate whether they are receiving the right level of pay, pension and holiday entitlement, and check Pay as You Earn (PAYE) deductions.
The research also showed around one in 20 workers receive no paid holiday entitlement, despite being legally entitled to at least 28 days' paid holiday a year.
Commenting on the report, Lindsay Judge, Senior Economic Analyst at the Resolution Foundation, said: 'The government's proposal to create a new single enforcement agency should leave it better placed to tackle these labour market violations than the multiple bodies currently operating, as long as it's properly empowered and resourced.
'Our analysis suggests that while violations take place across the labour market, the government should also prioritise investigations into sectors like hotels and restaurants, along with firms who make large use of atypical employment contracts, as that's where abuse is most prevalent.'