Reporting on the implementation of recommendations made in the UK Labour Market Enforcement Strategies for 2020 to 2021, 2021 to 2022 and 2022 to 2023

Director of Labour Market Enforcement Margaret Beels

Presented to Parliament pursuant to Section 5(1)(b) of the Immigration Act 2016

© Crown copyright 2024

Foreword

The Immigration Act 2016 which created the position of Director of Labour Market Enforcement requires the Director,

1. to prepare an annual labour market enforcement strategy, which:

• provides an assessment of the scale and nature of non-compliance in the labour market and
• sets out the strategic direction for the 3 existing labour market enforcement bodies:

Employment Agency Standards Inspectorate

Gangmasters and Labour Abuse Authority

HMRC’s National Minimum Wage Team

must be submitted to Home Secretary and the Business Secretary for their approval before publication.

2. to submit to Parliament an annual report on the extent to which enforcement activity undertaken during the year has had an effect on non-compliance.

This report assesses progress with regard to the recommendations made in the 2020 to 2021 strategy and the 2021 to 2022 strategy submitted by my predecessor Matthew Taylor. My interim strategy for 2022 to 2023, which had to be submitted soon after my appointment as Director in November 2021, made no new recommendations but re-emphasised several of Matthew Taylor’s earlier recommendations in the light of the evidence we had about the prevailing labour market.

Assessing progress is important to me in shaping future strategies. It is also important for Parliament to receive accounts of the activities of public bodies which are spending public money.

The UK economy has faced multiple shocks in the last 3 years and the government has a focus on achieving economic growth. It is important that this is combined with ensuring that workers are well treated and properly remunerated and that compliant businesses are not undercut by non-compliant competitors. An engaged and committed workforce will deliver business growth to the benefit of all.

Integral to achieving all of this is the role of the enforcement bodies themselves. Since the creation of the DLME they have demonstrated real progress – individually and by working together - in their compliance and enforcement work. I recognise and value the expertise and dedication of the enforcement teams across all 3 bodies, especially against a backdrop of tighter resourcing. I am grateful too for their collaboration with my Office to help me deliver against my statutory obligations and look forward to continuing to work together closely over the coming year.

Margaret Beels, October 2024

Section 1. Introduction

1.1 The role of Director of Labour Market Enforcement

The Immigration Act 2016 set out the role of Director of Labour Market Enforcement (DLME) with an aim to bring together an assessment of the extent of labour exploitation, and to set strategic priorities for labour market enforcement. The Director’s remit is to examine the work carried out by the 3 principal enforcement bodies:

• National Minimum/Living Wage Enforcement Teams in HMRC (HMRC NMW)
• the Gangmasters and Labour Abuse Authority (GLAA); and
• the Employment Agency Standards (EAS) Inspectorate.

The DLME must consider the whole spectrum of labour market non-compliance, ranging from accidental infringement to serious criminality and modern slavery.

The Act requires the Director to:

• produce an annual labour market enforcement strategy, for approval by the Home Secretary and the Secretary of State for the Department of Business and Trade;
• develop the DLME Information Hub; and
• write an annual report setting out for ministers how, collectively, the enforcement bodies performed relative to the strategy agreed by ministers.

The Immigration Act 2016 places different obligations on the 3 bodies regarding implementation of the strategy.^{[footnote 1]}

1.2 Annual report context

This annual report provides an assessment of progress made against implementation of the recommendations from the 2020 to 2021 and 2021 to 2022 Labour Market Enforcement strategies, both submitted during Matthew Taylor’s tenure as Director of Labour Market Enforcement.^{[footnote 2]} These were endorsed in my 2022 to 2023 interim strategy.

1.2.1 2020 to 2021 LME strategy

The 2020 to 2021 strategy made a series of recommendations relating to 4 sectors judged by the Office of the Director of Labour Market Enforcement (ODLME) risk modelling to be at particular risk of labour market non-compliance: social care, agriculture, construction, and hand car washes. All 4 sectors have different structures and operate in different ways, each potentially contributing to heightened risks for vulnerable workers. This strategy was submitted in March 2020, at the outbreak of the COVID-19 pandemic in the UK.

1.2.2 2021 to 2022 LME strategy

The strategy for 2021 to 2022 was delivered in January 2021 in the midst of significant economic and societal challenges, notably resulting from the pandemic and the transition to a new immigration regime following the UK’s departure from the European Union. Again, these changing conditions in the wider economy and labour market caused us concern regarding their potential impacts on those working in lower paid and precarious jobs.

Both strategies were published in December 2021, following significant delays in obtaining government clearance (partly due to the pandemic) and the ten-month gap between Matthew Taylor’s departure and my appointment in November 2021.

The 2020 to 2021 strategy included 30 whole or part recommendations. One recommendation (2b) was effectively rejected by government and is discussed further below.

This annual report assesses progress against delivery of 21 recommendations that were due to be implemented within 2 years, which is by the end of 2023.

The remaining 8 recommendations are not assessed here:

• 4-part recommendations are still ‘live’ with an implementation date of December 2024
• 4 more were made in relation to the creation of the single enforcement body (SEB) for labour rights.

The previous government consulted on a SEB in 2019 and committed to its establishment in its response in mid-2021,^{[footnote 3]} but this work was then paused.

Since elected in July 2024 the current government has committed to creating a Fair Work Agency (FWA), Its formation is included in the Employment Rights Bill, which had its Second Reading on 21 October 2024. Going forward I shall revisit these recommendations with the enforcement bodies to consider their relevance now. This annual report refers to “single enforcement body” where that is relevant to the historical context, and to the “Fair Work Agency” when reflecting what the present government’s ambition for a single body may deliver.

The 2021 to 2022 strategy included 12 whole or part recommendations, and I provide an assessment of progress against all of these in this report.

1.2.3. 2022 to 2023 LME strategy

My appointment as Director in November 2021 did not allow time for me to undertake a full call for evidence to produce a comprehensive LME strategy for 2022 to 2023 for submission by March 2022, as stipulated by the 2016 Immigration Act.

Accordingly, the 2022 to 2023 strategy, which I styled as an “interim strategy “did not make any new recommendations but focused on what I believed to be the priority recommendations from the 2020 to 2021 and 2021 to 2022 Labour Market Enforcement (LME) strategies published in December 2021, as well as the earlier 2019 to 2020 strategy. It highlighted where current labour market developments amplified the need for action and where the enforcement bodies and sponsor departments should be focusing their efforts. Publication of DLME strategies requires ministerial approval. For the 2022 to 2023 strategy this was not achieved till March 2023.

My interim strategy for 2022 to 2023 set out 4 strategic themes:

• improving the radar picture acknowledges the scale and nature of non-compliance remains an incomplete picture and seeks to understand better the evolving risks
• improving focus and effectiveness links to recommendations that have looked at using resources available in the most effective and efficient ways to target and evaluate activities
• better joined up thinking builds on recommendations that have looked to foster wider strategic thinking working with wider enforcement and others
• engagement and support look at ways to promote and share best practice, building informed businesses to prevent non-compliance and ways to ensure workers have better access to information about their employment rights

Table 1.2 below identified the priority recommendations using the thematic structure I have adopted for the 2022 to 2023 and subsequent strategies.

Table 1.2: Description of the 4-labour market enforcement strategy themes and their mapping to earlier strategy recommendations

Themes	Description	Priority recommendations from 2019/20, 2020/21 and 2021/22 strategies
Improving the radar picture	Understanding of the scale and nature of labour non-compliance remains partial. A major research study commissioned by my Office will help fill some of the overall picture, but the enforcement bodies themselves also need to have a better understanding of the extent of the threat of exploitation that workers are facing.	2019/20: 1 2020/21: 8a, 18, 19 2021/22: 3b, 5, 6a, 6b
Improving focus and effectiveness	In a tight public spending climate, the enforcement bodies will need a much sharper focus on prioritising their resources and to adopt a more systematic approach to understanding where their interventions work best.	2019/20: 1b, 2a, 3b 2020/21: 7b,17 2021/22: 1,4
Better joined-up thinking	As well as delivering to their own remits, the enforcement bodies, working with other partners from law enforcement and elsewhere, need to take a more holistic approach to tackling issues across the labour market.	2020/21: 4, 10, 11, 12a, 12b, 19 2021/22: 2, 7
Engagement and support	The majority of employers want to get it right but also want to operate on a level playing field. What more can be done to build on initiatives that promote best practice? We also must ensure that workers have access to better information and support to enforce their rights.	2020/21: 2a 3, 14, 15 2021/22: 3a

1.3 Annual report structure

For ease of reporting and to reflect the approach adopted by Matthew Taylor; I have structured this report along the lines of his 2 strategies, albeit reversing the order such that I consider first the general labour market compliance and enforcement issues presented in the 2021 to 2022 strategy (Section 2), before moving to the specifics of sector-based actions from the 2020 to 2021 strategy (Section 3).

As also required by the Immigration Act 2016, I then report on activities of the ODLME Information Hub since the period 2020 (Section 4). Finally, I present concluding remarks in Section 5.

All the assessed recommendations are listed in full in Annex A, with a traffic light system for recording progress with those recommendations where delivery by end 2023 was recommended. Annexes B and C list, respectively, those recommendations that remain live and those related to development of a single enforcement body.

Section 2. 2021 to 2022 strategy

2.1 2021 to 2022 recommendations in scope

The 2021 to 2022 LME strategy made 7 recommendations reflecting several issues most of which were deemed to be urgent and important at the time. Consequently, most had short timeframes for implementation and as such their progress is assessed in this annual report. These recommendations related to:

• further developing the risk model with more timely updates (Rec 1)
• adopting a more strategic sector-based joint working approach to tackle non-compliance in high-risk industries (Rec 2)
• better managing compliance risks from changes in the labour market (Rec 3)
• managing shared challenges across the enforcement bodies (Rec 4)
• understanding and developing ways to tackle risks in online recruitment (Rec 5)
• strengthening the evidence base to understand the impact of the new immigration on labour market enforcement, and reviewing the interaction between labour market and immigration enforcement (Recs 6a,6b, and 6c)
• intervening to address labour exploitation risks arising from the new immigration system (Rec 7)

Progress against each of these recommendations is discussed in turn below, along with an overall assessment of progress made (Box 2.1).

2.2 Risk Modelling

Recommendation 1: development of the risk model

The 2021 to 2022 strategy recommended that the enforcement bodies, together with the ODLME Information Hub and external experts, continue to develop the risk model, including widening the information sources used and improving the robustness of the data.

ODLME’s risk modelling approach has evolved and improved in robustness over the last couple of years. There is now a much sharper focus on seeking to place estimated risks in context, for instance to take greater account of varying sector size, as well as the severity of harms witnessed by the enforcement bodies. The intelligence and operational arms of the enforcement bodies continue to make an invaluable contribution to this process.

The ODLME risk model analysis relates draws on the enforcement bodies’ assessments, within their respective jurisdictions, across the spectrum of non-compliance. Other cross government agencies and public stakeholders report on non-compliance, principally around severe exploitation including modern slavery and human trafficking. These reports have informed the DLME strategic understanding of the risk in different sectors.

The risk model relies principally on data sourced from the previous 12-month period, including from complaints data, third-party information and, in the case of HMRC NMW, their own understanding of risk drawn from wider HMRC risk modelling. This gives an indication of whether the non-compliance risk in a sector has increased or decreased in comparison to the previous period. The analysis in the risk model also considers changes in the intelligence picture during the period under review, for example with the increase in referrals in the care sector under Op Topaz during 2022 and 2023. Recognition of in-year changes in the intelligence picture increases the timeliness of our assessment.

However, other than by assuming that the factors which create risk remain the same, the risk model does not give indications about what future risk might look like. Therefore, I encourage the enforcement bodies to consider ways in which awareness of new and emerging issues can be incorporated, as well as to continue to take a forward-looking approach to their individual assessment and prioritisation of risk, which by extension feeds into the wider risk model during discussions at the ODLME Strategic Coordination Group (SCG).

The development of ODLME’s risk modelling approach should greatly benefit closer working between the enforcement bodies. This should also highlight where businesses are non-compliant across multiple areas of regulation.

2.3 Sector-based approach

Recommendation 2: working with the ODLME through the Strategic Coordination Group

Matthew Taylor was very clear in his strategy for 2021 to 2022 that the enforcement bodies should be working with the ODLME through the Strategic Coordination Group (SCG) to adopt a more strategic, sector-based joint-working approach to tackle non-compliance in high-risk industries.

That strategy recommended that, through this group, the enforcement bodies should aim to develop ways of identifying, analysing, mapping and effectively tackling non-compliance in particular high-risk industries.

The strategy also recommended that a 2-year programme of work be developed, with appropriate interim milestones, to commence at the beginning of the 2021 to 2022 financial year. The SCG and enforcement partners have made some progress against this objective.

Prior to this recommendation, Operation Tacit (a large-scale multiagency intervention into the garment sector in Leicester in 2020 to 2021) was an example of enforcement bodies working together using formal agreements to share relevant information held, identify linkages, and investigate joined-up opportunities to disrupt non-compliant activity.

As a result of lessons taken from initiatives such as Operation Tacit, the enforcement bodies report that collaborative assessments are increasingly becoming part of the SCG approach.

The allocation of sector leads with the responsibility to analyse and address sector-specific themes of serious non-compliance should ensure that the work of the enforcement bodies is more targeted. Moreover, the SCG has fortified relationships across the enforcement bodies, creating an ecosystem in which knowledge is routinely shared, and issues raised in a timely fashion.

The initial recommendation was for a 2-year programme of work to be developed aimed at addressing non-compliance in those sectors judged most at risk of labour non-compliance. The SCG has taken forward this work with an initial focus on 3 sectors: adult social care, construction and hand car washes. Given the scale of the first 2 of these in particular, the SCG and enforcement partners have recognised the need for a longer-term programme of work (beyond 2 years), including a full evaluation of interventions to establish the impact of activity towards increasing compliance in these sectors.

Some progress has been made in the hand car wash sector, but the next key step is to develop joint-working activity carried out by the HMRC NMW, GLAA, Home Office Immigration Enforcement and the National Crime Agency (NCA), within the framework of the SCG. The intention of this joint activity going forward is to test the ongoing effectiveness of compliance interventions through repeat visits.

Preventing non-compliance in the construction industry by means of joint working via the SCG has proven more difficult. HMRC NMW assessed an industry subsector, but the outcomes did not demonstrate sufficient risk to develop further for joint activity. Additionally, the NCA as part of Operation Aidant, with SCG stakeholders involved, undertook development activity in construction. However, the lack of intelligence relating to specific construction subsectors, coupled with resource constraints, makes it difficult to plan joint activities.

Most progress following the sector approach has been through Operation Topaz – multi-agency working taking place to tackle complex labour non-compliance challenges in the adult social care sector. All 3 bodies within my remit have shared their understanding of the risks and issues and have taken action within their own remits. Lessons learned from Operation Tacit on the part of the enforcement bodies have improved joint ways of working for future operations.

Operation Topaz has proven to be particularly resource-intensive for EAS and GLAA. While HMRC NMW are involved as a partner, given that underpayment of adult social care workers is a regular issue, they do not encounter severe exploitation. The burden of Op Topaz risks has diverted resources from other compliance requirements and enforcement joint working in other sectors. Going forward this is an issue for strategic consideration by the LME Board and in due course the management of the Fair Work Agency, looking at the risks associated with trying to strike the right balance between available resources and ensuring priority areas of non-compliance are tackled in a timely way.

I am aware that there remain some areas for improvement in relation to joined up working within the SCG, for example, ensuring that all parties are consistent in their external communications, briefings, press lines and lines to take. Collaborative working is an area on which I shall continue to focus to explore a more systematic approach.

2.4 Managing compliance risks from changes in the labour market

Recommendation 3a: timely and impactful communication approaches

The 2021 to 2022 strategy highlighted how both HMRC NMW and EAS were limited in their ability to communicate externally for example in relation to having their own website presence and recommended that they be given the resource and ability to adopt more timely and impactful communication approaches to monitor and mitigate the potential risk to workers related to a changing labour market. Although, the constraints remain, I am encouraged by the creative and innovate ways the 2 agencies have sought to work within those limitations.

HMRC NMW report that they feel that they have the full support of their communications teams to provide a strong and far-reaching upstream programme. I remain concerned that enforcement is limited in its ability to run independent communications in a timelier fashion when it may have greater relevance, prominence and amplify the enforcement message Despite having a wealth of information and guidance to share with business and workers, EAS are unable to upload this onto their webpage given technical constraints in the DBT web pages. Imaginatively, EAS have resorted to using the websites of other organisations such as the GLAA, JobsAware and the Modern Slavery Helpline to share important information on their behalf. Clearly further progress to facilitating HMRC NMW and EAS’ ability to communicate effectively directly is desirable and I would urge DBT to address this in its planning for the Fair Work Agency.

I welcome the DBT NMW nationwide annual communications campaign prompting workers to check their payslips ahead of NMW increases, as well as the issuing of educational bulletins shared with government departments and employers emphasising important protections above headline rates.

HMRC has issued over 395,000 letters to employers and workers in sectors deemed to be “high risk”: that is those most likely to be underpaid. Letters to workers clearly articulate the common risks associated with the relevant sector and highlight the different complaint routes and overall benefits of reporting concerns. These resulted in a marked increase in worker complaints in sectors such as takeaway food and cleaning.^{[footnote 4]}

The enforcement bodies should be commended for having made excellent progress in the use of social media as an outreach tool. This is evident for example in HMRC NMW promote activity showcased on the Martin Lewis Money Saving Expert website,^{[footnote 5]} whose weekly emails sent out to over 8 million members of the public have included promotion of minimum wage issues. In addition, appearances in the media (on the BBC’s One Show) and at Citizens Advice webinars are effective in reaching a wide audience and allow the HMRC NMW’s Promote Team to walk the public through a fictional worker journey and answer questions.

Webinars speak to a much larger audience than face-to-face meetings and, as a result, significantly improve outreach capability. A programme of joint webinars between GLAA, EAS and HMRC NMW have covered topics such as the care sector, umbrella companies, information sharing, decent work and the Seasonal Worker Visa. Although often sector-specific, these webinars generally address requirements of the law, how compliance and enforcement work and how the enforcement bodies work together. Monthly posts are now also shared on Facebook and innovative measures are being introduced to reach younger workers, such as advertisements displayed within mobile phone gaming applications.

Regarding promoting compliance by supporting employers to get things right, HMRC NMW runs regular support programmes aimed at the home care (domiciliary) and care home (residential) sectors. In 2022 to 2023 this included an offer of support to over 11,600 employers registered with the CQC.

I am pleased to note that the types of communications employed, and topics targeted, are continually improved as a result of the regular review of customer feedback survey data on helpfulness and quality. Additionally, I welcome the concerted efforts of DBT NMW to engage payroll providers, trade unions, accountancy firms and large employers with NMW guidance.

Recommendation 3b: maximising the use of new and alternative data sources

Data, information and intelligence are the lifeblood of an effective compliance and enforcement regime, both to identify labour market risks and to understand how interventions made by the enforcement bodies are making a difference.

The 2021 to 2022 strategy therefore recommended that all 3 bodies seek to overcome current intelligence and information gaps by maximising the use of new and alternative data sources (for example from fraud investigations) to identify potentially non-compliant employers.

I am pleased to see that HMRC NMW has been innovative in identifying and capturing new types of data available to it and utilised this data as another tool in their armoury to strengthen their evidence base when risking cases.

Therefore, I highlight the usefulness of the more proactive approach taken by the GLAA to employ their analytical team and Regional Field Intelligence Officers to spread out across sectoral networks to identify opportunities to collect data relevant to specific problem profiles. I am also pleased to see the work of the EAS with the Cheshire Police to explore new data depositories, in addition to their work with JobsAware to discuss labour market evolution in the light of ever-increasing use of artificial intelligence and the Online Safety Bill.

GLAA has also secured a time-limited memorandum of understanding to facilitate access to land registry data pertaining to landowners of locations where potentially non-compliant hand car washes are known to operate. I encourage the GLAA to consider means of extending this mechanism formally.

Work is underway by the GLAA to engage with sea fisheries for the purpose of identifying, and evaluating the accessibility of, new data sources within the shellfish gathering industry.

The enforcement bodies maintain good relations with relevant trade bodies, and I encourage them to do more to find ways to increase information sharing activity with the trade bodies to gain specific insights beyond those which are already published.

2.5 Managing shared challenges

Recommendation 4: closer working across the 3 bodies to manage shared challenges

Beyond proposals for closer working in the intelligence and operations space, the 2021 to 2022 strategy recommended the need for the 3 bodies to work more closely together to identify common challenges and seek solutions for example with respect to resources, innovation and training.

Some progress has been made against this recommendation. Although ODLME convened initial discussions with the bodies in early 2021, these were put on hold as progress on the SEB itself stalled.

Despite lack of progress on the SEB, one of my objectives going forward is to identify where and how some of the benefits of closer working in this space can be achieved. I am pleased to see that the 3 bodies have now established a forum where they meet regularly. This has led to production of joint strategic collaboration and communications plans, with progress reported to the quarterly LME Board.

2.6 Online recruitment

The 2021 to 2022 strategy highlighted the increasingly severe risk posed to workers in the online recruitment sector during, and now following, the COVID-19 pandemic. Online jobs advertising is increasingly being used to advertise and to seek work but is subject to limited regulation and current economic conditions exacerbate risks from online jobs scams. As well as advertising jobs that do not actually exist, common scams centre around charging fees for bogus services such as fake background checks, fake qualifications and payments for curriculum vitae (CV) writing services. Identity theft is also occurring in the sector.

The 2021 to 2022 strategy made 2 recommendations in this space: one around improving detection of fake jobs advertised online (Recommendation 5a), and one seeking to improve our understanding of the online threat (Recommendation 5b).

Recommendation 5a: identifying fake and fraudulent jobs advertised online

Both DBT and EAS have made some progress against this recommendation through their support for JobsAware ^{[footnote 6]} (formerly SaferJobs). This has created a worker voice-led system of reporting, including through testimonies and complaints, which allows the enforcement bodies to recognise trends and pressure points in online recruitment. In addition, it provides a means of quickly identifying and removing harmful or fraudulent job adverts online. I am also pleased to note that EAS have provided funding to JobsAware to support the development of their website, internal system for flagging trends and risk notification system for job boards.

EAS has worked closely with both the Home Office and first with the Department for Media, Culture and Sport (DCMS) and then with the Department of Science, Innovation and Technology, DSIT) who took on the policy lead for on-line safety. Since the Online Safety Act was enacted in October 2023 EAS are now working with Ofcom to discuss how their regulations and compliance standards may play a critical role in stamping out fake jobs. Although EAS does not hold regulatory responsibility in this space (fake jobs are considered fraud), they still retain a strong focus to ensure the public is sighted and informed to both identify fake jobs and to challenge behaviour that might be indicators of fraud in the jobs market space.

EAS have also supported the development of a tool for accreditation in the online recruitment sector. However, it is clear that when identifying issues of non-compliance online, the enforcement bodies face the challenges of extra-territoriality and unprecedented large volumes of data.

Moreover, even though case law suggests that a case can be tried in the UK if a large proportion of the crime took place there, the question remains as to how an accused person from abroad can be made to attend a trial in the UK.

This is a very complex and still underdeveloped area of knowledge across the enforcement bodies. I commend the alternative approaches taken by the EAS in an attempt to address these challenges, such as the online Advertising Programme, to ensure that fraudulent job adverts are included and criminalised, whilst ensuring online recruitment meets the highest possible standards.

I welcome the initiatives underway by the EAS to focus on educating workers on the risks of online recruitment, as well as to identify and address opportunities to update current limitations in relevant legislation.

Recommendation 5b: the review of online recruitment

On the recommendation 5b(i) that DBT prioritise the completion of the review of online recruitment (accepted from the 2019 to 2020 LME strategy) to evidence better the online harms threat, only limited progress has been made. That said, more evidence is emerging on the scale and nature of the online threat via quarterly reporting by JobsAware, discussed above, that is being supported by EAS. Further evidence on the prevalence of job scams was also published in March 2023 as part of a broader study by The Office of Communications (Ofcom) into the scale and impact of online fraud.^{[footnote 7]}

While some progress is being made to establish the evidence base, there is clearly further to go. I recognise the limited resources available to EAS but encourage continued close working with other parts of government and industry in order to identify and seek to address potential harms to jobseekers in the online space. The growth and spread of digitisation and increasingly now, artificial intelligence, in our daily lives will only require an even more joined-up approach to meeting the challenges posed by these technologies.

Matthew Taylor’s accompanying, recommendation 5b(ii), to feed the findings of the 5b(i) review into broader government and Industry discussions around regulating online activity, also has not been progressed. These recommendations were made with a view to identifying practical safeguards and remedies for jobseekers affected by the threat of online harms.

In the interim, I support the enforcement bodies continuing to identify and deliver practical safeguards to protect job seekers online. An excellent example of this is the work carried out by HMRC NMW routinely to search for online job advertisements which have a high NMW risk and to reach out to inform these employers of their responsibilities.

2.7 Immigration and labour market enforcement

The new immigration system introduced in the UK in 2021 signalled a shift away from low-skilled economic immigration towards higher skilled migrant workers. Whereas EU membership afforded easy access to labour from anywhere within the European Union - in practice mostly came from central and eastern Europe - these sources of labour became far more restricted.

Recommendations 6 and 7 of the 2021 to 2022 strategy identified a number of areas of concern about how these changes might adversely impact labour compliance, particularly in those sectors which previously had a high share of EU workers. Furthermore, the strategy identified a lack of preparation and readiness to anticipate and, as necessary, mitigate these risks. With the expected closure of the EU Settlement Scheme in mid-2021, the strategy called for urgent action to implement its recommendations.

Recommendation 6a: establishment of a strategic oversight group

The 2021 to 2022 strategy highlighted the importance of increasing the focus and building the evidence base around the impact of the new immigration system on labour market enforcement. To this end, the strategy recommended that a strategic oversight group be established involving relevant government departments and enforcement agencies and that this workstream should be implemented by the end of June 2021, before the deadline for applications for the EU Settlement Scheme, in order to have effective results.

No progress has been made on this recommendation.

The enforcement bodies told us that impacts pertaining specifically to European Economic Area (EEA) migrant workers have lessened following the UK’s departure from the European Union. However, it remains important that all bodies have a good understanding of how the new immigration system impacts EEA and other migrant workers in order to prevent, and timely respond to, labour market issues affecting them.

Two years on from this recommendation, we have witnessed serious labour non-compliance issues in both the agriculture and the adult social care sector. Failure of government to fully anticipate these problems now requires a significant degree of intervention by the enforcement bodies.

Recommendation 6b: the impact of the new immigration system and independent evaluation

To improve the evidence, base around the impact of the new immigration system, Matthew Taylor recommended that the Home Office and DBT commit to regular and ongoing monitoring of the impact of the new immigration system on labour market compliance, building on existing structures such as the Vulnerability Advisory Group, operated by Home Office.

This structure has now been replaced by the Legal Immigration User Experience Group. Despite the commitment of the Home Office and DBT to attend the User Experience Group quarterly, along with the Seasonal Worker Group, both departments acknowledge that little progress has been made against this recommendation. It appears that, whilst fora providing insight and feedback regarding specific migration routes exist, for example in relation to seasonal workers, they often remain untapped from a labour market perspective.

However, I am encouraged to hear that the Home Office plans to reach out to a number of these groups, such as those pertaining to student visa routes and domestic worker routes, to establish these vital channels of communication and continue to improve their evidence base.

I have received no evidence to suggest that the recommendation to carry out an independent evaluation of the impacts on labour market enforcement after 18 months of the new immigration system has progressed, even in an initial form.

Recommendation 6c: review interaction between labour market and immigration enforcement

Matthew Taylor recommended that Home Office and DBT, working with the enforcement bodies, should review the interaction between labour market and immigration enforcement to ensure sufficient protections for migrant workers and improve intelligence flows via safe reporting structures. This should feed into development of the SEB.

A report by the Liberty Organisation found that individuals who fear they have insecure immigration status are often fearful of reporting a crime that they are victim to, or witness of, to any statutory authority for fear that enforcement action will be taken against them.^{[footnote 8]}

Home Office undertook a review in December 2021 which committed to implementing migrant victim protocols aimed at breaking down these barriers and signposting the correct authority to whom migrant workers can make complaints.^{[footnote 9]}

I am aware that a number of challenges arise when enforcement bodies work alongside third parties on issues pertaining to the immigration system. I also recognise that both EAS and GLAA work closely with a wider range of NGO groups. I understand that EAS’ customer first approach is well regarded by NGOs, as this gives pre-eminence to the exploitation of the victim rather than their status.

NGOs and unions tell me that they are reluctant to engage with government agencies in cases where an individual’s immigration status is insecure or uncertain, fearing that addressing immigration status will take priority over exploitation.

Recommendation 7a: raising awareness about immigration changes to workers and employers

The 2021 to 2022 strategy also recommended that the enforcement bodies identify sectors and locations with high numbers of European Economic Area (EEA) migrant workers and issue communications targeting both workers and employers to raise awareness about the immigration changes, thereby mitigating the labour exploitation risks of the new system.

The enforcement bodies told us that following Brexit and the COVID-19 pandemic it is no longer the case that the UK is receiving high numbers of EEA migrant workers particularly in lower skilled sectors, but instead are seeing increasing arrivals of migrant workers from locations outside of the EEA, such as from Central Asia, Nepal, Indonesia and countries in South America.^{[footnote 10]}

Given the changing patterns, there are some ongoing concerns requiring pro-active intervention by some of the enforcement bodies and partner agencies.

The first relates to those EEA migrants with pre-settled status. We are aware of some employers seeking to exploit worker uncertainty here. It remains important that the enforcement bodies proactively engage with the recruitment sector to identify, and communicate to both workers and employers, issues arising in the labour market that affect international arrivals.

The second concerns the increased use of non-EEA workers instead of EEA migrants. Often in low-skilled sectors there is a high concentration of migrant labour and what may be happening is a switch to labour from outside the EEA. Such labour is at no less risk, and this could be greater as low-skilled immigration routes have been tightened, potentially increasing the risk of irregular migration and/or contraventions of visa requirements.

In terms of mitigating actions, the GLAA has produced a brief for licence holders on the post-EU Exit right to work check requirements. In conjunction with other stakeholders, GLAA has also made a video to support workers in better understanding the working environment they will encounter when arriving from outside of the EU.

HMRC NMW told us that the change in immigration regime had been associated with increases in prices and pay, thereby driving pay for some workers above minimum legal rates, hence helping to reduce minimum wage non-compliance risk. At the same time HMRC NMW had also been working with Home Office to identify from their systems areas of potential increased risk.

EAS told us that by its very nature the shifts in demand in the recruitment sector can act as a leading indicator for highlighting in which sectors of the economy issues may arise (for example, HGV drivers). Hence, EAS can respond accordingly.

The examples discussed above indicate a welcome awareness of remaining on top of emerging threats. I encourage the enforcement bodies to continue to bolster their efforts to share information with workers and employers through communication campaigns in relation to immigration changes.

Recommendation 7b: engagement with other enforcement bodies and third-party organisations

In his 2021 to 2022 strategy, Matthew Taylor emphasised the importance of acting urgently to mitigate the labour market exploitation risks of the new immigration system. The strategy recommended that the enforcement bodies increase their working with one another, as well as with third party organisations (such as unions and NGOs), to better monitor and timely respond to emerging risks from the new immigration rules. Some progress has been made here by the enforcement bodies:

• EAS undertakes a significant amount of engagement with unions. It was precisely the strength of this relationship that led to Operation Topaz as a concerted effort of the enforcement bodies to collaborate with recruitment agencies to prevent the exploitation of adult social care workers on care and student visa schemes
• the GLAA participates in the quarterly Joint Analysis Meetings with the NCA to assess new trends in data, including immigration and enforcement issues, with the aim of informing labour market enforcement solutions. These issues are also discussed regularly at the SCG and at the Home Office led Illegal Working Steering Group, where all parties have the opportunity to raise questions and concerns
• I am also aware that HMRC NMW are liaising with Home Office Immigration and Enforcement (HOIE) to obtain clarity in regard to the impact of the EU Settlement Scheme (EUSS) on worker status. I am pleased that HMRC have been provided with access to the EUSS database in order that, where appropriate, they may check worker status prior to and during any investigations

Progress has also been made against this recommendation in other sector-specific workstreams.

In the agricultural sector, the GLAA regularly engage with Foreign, Commonwealth and Development Office (FCDO) posts to build relationships with the relevant authorities in recruiting countries. GLAA recently signed agreements with the governments of Kyrgyzstan and Uzbekistan in a move to strengthen the protections for workers arriving in the UK.^{[footnote 11]} More than 6,000 seasonal workers came to the UK in 2022 from these 2 countries. In addition to this, Defra conducts an annual survey of those issued with a seasonal worker visa.^{[footnote 12]} This provides a rich source of data and evidence on many aspects of the worker experience.

Work with NGOs in the hand car wash sector, such as the Clewer Initiative, the Responsible Hand Car Wash Scheme which previously looked at raising standards of compliance by voluntary means across the sector, and the Modern Slavery Helpline, have enabled both HMRC NMW and the GLAA to compare patterns of non-compliance and fill evidence gaps in the sector following the new immigration rules. Section 3 below further discusses developments in this sector.

Whilst these actions have been effective in addressing newfound pockets of risk in relation to the new immigration rules, they do not amount to the more structured, systematic approach to building these mechanisms into business-as-usual joint ways of working to ensure that emerging risks are actioned at the earliest opportunity and cannot be overlooked.

Section 3: 2020 to 2021 labour market enforcement strategy

3.1 Introduction

Where initial LME strategies considered compliance and enforcement issues generally, the 2020 to 2021 strategy applied this approach at a sector level, concentrating on 4 at-risk sectors for labour non-compliance: adult social care; agriculture; construction; and hand car washes. Key to this decision was recognition that industry structures can vary significantly, with different business and employment models each contributing their own particular compliance challenges.

As in section 2, progress against each of the recommendations from the 2020 to 2021 strategy is discussed in turn below, along with an overall assessment of progress made (Box 3.1).

The 4 sectors discussed below may be characterised by one or more of the following:

• non-compliance issues are deep-rooted and will need to be tackled over many years
• a multitude of stakeholders both inside and outside of government, each with an interest in the sector but none with the overall remit to lead change
• complexity in sectoral structure, resulting in poor knowledge and understanding of scale and nature of non-compliance within sub-sectors

These factors help to explain why implementation of the strategy recommendations were envisaged over a longer time period. The majority of the recommendations therefore remain work in progress.

The enforcement bodies working closely with external partners, particularly within high-risk sectors, to find innovative ways to disseminate information to both employers and workers is a productive route.

The rest of Section 3 records sectorial specific activity, but I should also recognise certain valuable cross sectorial activity also undertaken by the enforcement bodies.

An excellent method to address themes of non-compliance risk across the sectors has been HMRC NMW, working with Unison, organising thematic webinars, for example, on the topic of unpaid internships.

The large-scale dissemination of information within specific geographical areas is taking place through the HMRC NMW’s Geographical Compliance Approach which is an innovative and promising methodology. It proactively targets a geographical region with the initial offer of education and employer support calls (essentially business health checks) to all relevant parties in the region, before later delivering a full compliance approach. In each location HMRC uses a focussed programme engaging a variety of stakeholders, business owners and workers (for example through chambers of commerce, local authorities, community centres, and food banks). They also speak to stakeholders in the locality to gain local knowledge, especially for harder to reach populations. HMRC press office also communicates with local media outlets and other local communications teams.

This approach is both comprehensive and cost-effective as it helps prevent businesses being overlooked in sectoral gaps.

I am pleased to see that the ripple effect of this approach is already evident in some areas of the UK.

3.2 Adult social care

Tackling labour non-compliance in the adult social care sector is a high priority for me, as indeed it was for Matthew Taylor. If anything, the non-compliance risks are greater and more serious now than in early 2020 when Matthew Taylor’s 2020 to 2021 strategy was submitted to government. In Feb 2022, new immigration routes for adult social care workers were opened in an effort to plug the gap in vacancies (2023 to 2024 totalling 131,000 in England ^{[footnote 13]}). With this, though, came heightened risk, especially when the structures were not in place to deal effectively with both visa and labour abuses. I commend the enforcement bodies both within and beyond my remit for their joint work in the past year on Operation Topaz. But more action remains pressing and will require effective, strategic working across government and within the industry itself to ensure labour supply into the sector is managed with minimal risk of labour exploitation.

Changes made to the Health and Care Work visa in early 2024 have already impacted the number of international recruits arriving in the UK and may also affect their work experience.^{[footnote 14]} This flags a continuing need for vigilance as regards worker exploitation on the part of the enforcement bodies.

In his 2020 to 2021 strategy, Matthew Taylor flagged the underpayment of minimum wage, particularly in relation to calculating hours worked as the most common non-compliance affecting adult social care. This can in part relate to confusion on the part of employers and workers around what constitutes working time in the care sector, such as time spent on-call, training time, travelling between home care clients or sleep-in shifts. There are similar concerns around deductions from pay, such as fees charged for Disclosure and Barring Service (DBS) checks or paying for training. All of these factors may drop adult social care workers’ pay below the NLW. Furthermore, there is evidence of dubious employment status practices being used in the care sector such as classing domiciliary workers engaged by private individuals as self-employed rather than employees or using zero hours contracts to avoid paying for travel time.

My strategy for 2024 to 2025 continues the focus on labour exploitation in this sector. I shall report on the enforcement response to that in due course.

3.2.1 Recommendations due in the period of this report

Recommendation 2a: updating guidance

The 2020 to 2021 strategy recommended that DBT, in collaboration with HMRC NMW, continue to improve processes to ensure that guidance around national minimum wage / national living wage is promptly updated following significant legal or policy developments.

DBT and HMRC NMW who both have responsibilities in this area have made steady progress against this recommendation embedding guidance processes into their business-as-usual upstream programme.

Within DBT, the NMW policy team meets monthly with the Business Professionalism, Learning and Guidance Team, who have expertise in implementing changes, to provide timely evaluation of, and feedback on, operational implications of any changes to NMW. In this way, the guidance team does not simply keep up with policy developments but rather, is intrinsic in policy delivery.

The benefits can be seen in updates made to guidance to ensure that information regarding the definition of NMW is clear, similarly, what constitutes working time for those in the care sector. Additionally, the HMRC Technical Team and DBT Legal Team evaluate and update the ‘Calculating the Minimum Wage’ guidance where necessary to reflect learnings from legal challenge and employment tribunals, as well as to ensure that guidance is consistently in step with regulatory changes.

Alongside these internal trigger points, I am pleased to note that the enforcement bodies routinely capitalise on external opportunities for updating guidance. The DBT Compliance and Enforcement Strategy Team engage with the Advisory, Conciliation and Arbitration Service (Acas), which DBT sponsors, to learn of upcoming operational changes and to review customer feedback which may point towards necessary guidance updates.

Moreover, I am aware that, as a part of the HMRC Promote outreach programme, it is embedded practice for HMRC NMW colleagues to feedback discovered areas of repeat confusion and recurring challenge to DBT NMW colleagues, in order that the guidance web page can be iteratively updated as a direct result of public interaction.

Similar updates may also take place in response the findings of Low Pay Commission (LPC) public consultations or to feedback from the devolved governments. An example of this recently was collectively to redefine apprenticeship guidance across the 4 nations where public feedback had reported existing guidance as too prescriptive and outdated.

Recommendation 2b: Development of sector-specific guidance

The 2020 to 2021 strategy also recommended that the enforcement bodies re-examine the idea of developing sector-specific guidance in order to address complexities in NMW guidance for those industries where the nature of work is atypical, including but not limited to social care.

I understand from their discussion that DBT and HMRC NMW share the view that sector-specific guidance is not the most effective way forward, given the duplicative nature of addressing the same issue in individual pieces of guidance which are in fact relevant to multiple sectors. Recommendation 2b was therefore rejected by the previous government.

Instead, DBT have taken a cross-cutting issue approach by publishing thematic guides which address topics where breaches are common, for example, deductions for uniforms, apprenticeships, and unpaid working time. This ensures that employers from all sectors are able to find guidance relevant to them.

A further example of this has been the educational bulletins published by DBT alongside each minimum wage Naming Round, with a recent bulletin focussing on salary sacrifice schemes in February 2024.^{[footnote 15]} I encourage DBT to continue to update and issue thematic guidance as appropriate, and HMRC NMW to continue with promote awareness raising activity.

Recommendation 3a: Information pack of employer obligations for local authorities The 2020 to 2021 strategy recommended that the enforcement bodies work closely with external partners in high-risk sectors to raise awareness on employment rights among employers and workers in the social care sector.

Specifically, this included the creation of an information pack of employer obligations for local authorities to pass on to those receiving direct payments for care needs. This information pack should also include commissioning practice guidance for local authorities to consider as a part of their own compliance aims.

I recognise the efforts of HMRC NMW in developing and sharing this information pack with those within local authorities who commission care services, noting that this engagement can be resource intensive due to the varied organisational structures of local authorities across the country. However, I am also aware that uptake on this guidance offer has been limited. Therefore, I welcome the year one activity review, currently being carried out by HMRC NMW as a part of their 4-year programme of work, to promote compliance in this area.

In November 2023 HMRC NMW, the GLAA and the Department for Business and Trade also ran a joint webinar entitled Protecting workers’ rights in the care sector.^{[footnote 16]}

Regarding preventing compliance by supporting employers to get things right, HMRC NMW will run regular support programmes aimed at the home care (domiciliary) and care home (residential) sectors. In 2022 to 2023 this included an offer of support to over 11,600 employers registered with the CQC.

Table 3.1: promote work undertaken by HMRC NMW in the adult social care sector 2021

2021

NMW awareness / training delivered

Trade union representations from GMB and Unison (largest union for social care workers).

Care sector webinars – live and pre-recorded

Paying the National Minimum Wage in the social care sector (recorded Feb 21) - 526 views

NMW – Social care workers (Recorded Mar 21) 38 views.

One To Many Activity (OTM)

Delivered to employers of mobile carers to explain travel time risk and inviting them to view a recorded webinar. Letters issued to 11,622 employers registered with the CQC as delivering homecare.

2022

NMW Simpler Work Guides

Bespoke care sector guide created for Unison which was distributed to their 3,500 members. Listing common issues in the sector and how to report to HMRC.

July to August 2022

NMW awareness / training delivered

To the Care Quality Commission – approximately delivered to 100 to 120 Care Quality Commission inspectors across the UK.

National Care Association

Care sector webinars – live and pre-recorded

Paying the NMW correctly in the social care sector – common risks for employers (Recorded July 22) 61 views.

NMW Employer Support Programme – introduction and Q&A (July 22 – 84 attended).

Paying the National Minimum Wage correctly in the care sector 2 x Live Webinars, 829 attended (August 2022), 197 views of recording of webinar.

October to December 2022

NMW awareness / training delivered

Skills for Care - Multiple sessions delivered to 190 employers (from care homes to individual employers).

Birmingham council – care companies – 45 employers

Department of Health and Social Care advisory group – numerous key stakeholders across the sector to educate and network.

Care sector webinars – live and pre-recorded

NMW Employer Support Programme – introduction and Q&A

(October 2022 7 attended) 43 views of recording of webinar.

2023

January to April 2023

NMW awareness / training delivered

Staffordshire council – care companies – 33 employers.

Nottinghamshire council – care companies – 35 employers.

Care sector webinars – live and pre-recorded

Social Care GLAA/EAS collaboration webinar – March 2023 (349 attended).

One To Many Activity (OTM)

Delivered to employers in the sector including a checklist of all common issues within the sector and signposting to further info and support.

Homecare Association

NMW article published in the Homecare Magazine in March 2023 and circulated to approx. 4,000 members.

May to July 2023

NMW awareness / training delivered

Barking and Dagenham Council Care Home and Home Care forums – 25 employers.

Local Government Association and Department for Health and Social Care

Deliver a live webinar and/or awareness sessions in May / June 2023 for both colleagues and providers.

November to December 2023

Care sector webinars – live and pre-recorded

Social Care GLAA/EAS collaboration webinar repeated.

One To Many Activity (OTM)

OTM activity to 20,000 employers in November to December 2023 from CQC data.

Homecare Association

NMW Homecare Association guide issued to 2,870 employers.

Recommendation 3b: Dissemination of information to workers in high-risk sectors generally and specifically adult social care

I am encouraged by some excellent cross sectoral activity on training. The Level 1 qualification in Workers’ Rights and Labour Exploitation, was developed by Skills and Education Group and the GLAA, along with the University of Nottingham’s Rights Lab and Boston College, with funding support from Home Office. The qualification, launched in early 2021, provides an introduction to workers’ rights as part of the UK curriculum to help individuals protect themselves from labour exploitation. This initiative, which has been recognised with an award nomination, has been well received and proved to be a high impact yet low-cost project.^{[footnote 15]} I hope the enforcement bodies will continue to explore options for disseminating information at the point of certification or training.

Specifically, as regards care workers, I endorse the re-writing of the care worker welcome pack and commitment to sharing this pack with individuals entering the UK on a care visa. Initiatives such as these help to inform care workers of their employment rights from the outset.

I am not aware of any current initiatives to disseminate information specifically to care workers at the point of training but would welcome this.

Recommendation 4: closer working with local authorities

Beyond the recommendation made above (Recommendation 3), the 2020 to 2021 strategy called for further interventions by the enforcement bodies to provide support to local authorities in their due diligence and monitoring of externally commissioned care services, with a focus on workers’ rights. This was to include development of a good practice guide to include the local authorities’ procurement processes (Recommendation 4a) and further awareness-raising of the enforcement bodies powers to ensure greater flow of information where non-compliance is suspected (Recommendation 4b).

There have been some examples of progress here. HMRC NMW told me that in December 2022 they delivered a session on key risks as part of workforce advisory group meeting (WAG) call with DHSC, representatives from local authorities and other bodies such as Skills for Care.

Since this recommendation was made the Health and Care Act 2022 has given the CQC new powers independently to review and assess the performance of local authorities (authorities) in delivering their adult social care functions. These powers came into effect on 1st April 2023 and will enable CQC to start to understand the quality of care in a local area or system and provide independent assurance to the public of the quality of care in their area. The aim is for all local authorities to be audited between September 2023 and autumn 2025. In addition to this, in February 2023 CQC introduced a roadmap for improving how adult social care data is collected, used and shared in care data matters.

HMRC NMW is working with the local government associations (LGA) and local authorities to improve understanding of how LA commissioning impacts NMW compliance and also obligations on personal budget holders. They are also working with stakeholders including unions, employer bodies and government to promote compliance.

Recommendation 5: consideration of worker rights and enforcement in wider social care reform

Adult social care is delivered by over 1.7 million workers in the UK, around half of whom are care workers or senior care workers.^{[footnote 17]} Low pay, a demanding work environment, insufficient training and poor career development opportunities contribute to high staff turnover and vacancy rates. Additional vulnerabilities apply to workers recruited from overseas.

Recognising the wider policy debate about social reform, the 2020 to 2021 LME strategy recommended that DBT and Home Office work closely with DHSC to ensure reform includes consideration of worker rights and enforcement, building on learning from the variability in social care models within the UK.

In April 2023 the then government published a Next Steps paper^{[footnote 18]} providing an update to its White Paper on Social Care reform in 2021 (DHSC 2021). Many of the measures from the White Paper have either been dropped or scaled down, including investment in workforce training and staff wellbeing. The previous government delayed its funding reforms to October 2025 (HM Treasury 2022).

Throughout these interventions, there has been little visibility of the need to recognise or directly tackle employment rights issues for care workers. Promoting and enforcing these rights became even more urgent following the significant increase in international recruits as they became eligible for the Health and Care Worker Visa from February 2022. Media reports have highlighted serious allegations of abuse and modern slavery of migrant workers in the social care sector. The enforcement response (Operation Topaz) by the bodies under my remit has been resource intensive. The care industry is now working with relevant government agencies to improve the processes and immigration policies have been changed.

Recommendation 5 remains relevant as co-ordinated action across government with policy makers and enforcement agencies is needed to deliver the social care system for the future. Planning must include providing the trained, properly remunerated and supported workers.

“Make Work Pay” advocates what it calls a “New Deal for Social Care Workers including a Fair Wage Agreement and Chapter 2 of the Employment Rights Bill contains provisions to set up The Adult Social Care Negotiating Body to deal with remuneration, terms and conditions of employment and other specific matters relating to employment of social care workers. Additionally, joint working between the Department for Health and Social Care and ADASS, on elements of the regional hubs for international recruits, should be credited.^{[footnote 19]}

3.2.2 Recommendations in progress

Three further part recommendations relating to adult social care remain in progress with implementation dates of end 2024 (Recs 1a, 1b and 1c) and are noted but not formally assessed in Annex B as the deadline for delivery in Dec 2024.

Recommendation 1: strengthening relationships with care regulators across the UK

1(a) Raising profile

HMRC NMW have developed a 4-year strategic plan for dealing with social care, which outlines a short, medium and long-term compliance program that embraces all aspects of Promote, Prevent and Respond approaches. Through the strategy HMRC NMW aims to address risks across all strands of the care sector.

• In terms of promoting compliance with employers and educating workers about their rights, including personal budget holders, HMRC NMW are working with DBT to review and improve customer facing guidance. This includes running campaigns to target workers and NGOs; upskilling Care Quality Commission (CQC) inspectors to understand and identify NMW issues.

• HMRC NMW respond to non-compliance by investigating complaints and tackling recidivism, through a programme of targeted enforcement activity and working with external stakeholders to collectively tackle serious labour market abuse where it occurs.

All 3 bodies report having established good working relationships with the care sector in the devolved administrations too, as well as partnering with the CQC as part of Operation Topaz.

(a) 1(b)Actively supporting training for inspectors

HMRC NMW reported that their Promote Officers have established links with the CQC and have delivered NMW awareness training programs for 170 CQC inspectors. HMRC NMW has also delivered awareness-raising sessions with the Home Care Association (HCA), whose quarterly newsletter has also been used to raise awareness of minimum wage issues in the sector.

In addition to this HMRC NMW have delivered multiple sessions to 190 employers (from care homes to individual employers) in November and December 2022. There was also a joint webinar focused on social care with GLAA and EAS in March 2023.

GLAA will be delivering a series of presentations to CQC operational staff on investigating in the care sector and how to spot the signs of modern slavery and labour exploitation.

(b) 1(c)Review gateways and processes for intelligence-sharing and signposting complaint/whistle blowing routes

HMRC NMW reported that they have reviewed their legal gateways, but they do not have the facility to share intelligence proactively with the CQC, except in exceptional circumstances. There is no restriction on CQC (from HMRC-NMW’s perspective) sharing intelligence with HMRC and some intelligence sharing is now underway.

EAS report an increase in intelligence-sharing on social care with the authorities in Northern Ireland.

3.3 Seasonal workers in agriculture

Labour providers in the agriculture sector have been subject to GLA/GLAA licensing since 2005 and since then progress has been made to improve the working conditions in the sector. The majority of SWVS employers recognise that treating seasonal workers well is both the right thing to do and makes business sense if they want to retain experienced workers within the season and from one season to the next. Yet it remains the case that seasonal agricultural workers are a vulnerable group at risk of potentially serious harm through labour exploitation. It is a low margin industry. Pay typically includes a significant element of piece rate work which can make it difficult for workers to check and validate their pay against hourly rates. Work is less predictable, work locations can be remote, often requiring on site accommodation. The work is physically demanding. Those most at risk are inexperienced workers involved in the picking of fruits, vegetable and flowers following the season of each crop.

Recognising too that a large proportion of the seasonal labour supply into this sector comes from abroad, recent changes to the UK’s immigration regime – especially around economic migration in low-skilled work – means that this is a cohort of workers potentially vulnerable to exploitation, because their freedom to change jobs is limited. Such concerns have been voiced by both Matthew Taylor in his 2021 to 2022 strategy (see Section 2.7 above) as well as in my strategy for 2023 to 2024 (DLME 2023).

GLAA has published its strategy 2023 to 2026^{[footnote 20]}, with 3 strategic priorities:

• be a robust and effective regulator
• be known as experts in worker exploitation
• be an essential operational partner

I anticipate that in implementing that strategy they will make further progress with regards to implementing recommendations below.

3.3.1 Recommendations due in the period of this report

Recommendation 7a: increasing compliance inspections and routine visits

The 2020 to 2021 strategy recommended that the GLAA and Home Office review the licensing system and budget to include increased compliance inspections and routine visits.

The GLAA strategy for 2023 onwards commits them to become a more effective regulator. At the same time GLAA has been put under increasing budget pressure. GLAA has recently implemented a new target operating model, enabling them to review and refine processes, resulting in an increase in compliance inspections in the current year and a better match between resourcing and inspection prioritisation.

The GLAA are in the process of evaluating annual licence fees, with the aim being to recover more costs than at present. This should factor in the financial impact of carrying out increased inspections.

Recommendation 7b: Evaluating unannounced visits

The 2019 to 2020 LME strategy had recommended GLAA undertake more unannounced visits of labour providers. As follow-up, the 2020 to 2021 strategy then recommended that the GLAA and Home Office should evaluate their effectiveness.

Home Office continues to find that unannounced visits are useful in the hand car wash sector. However, the GLAA have raised some difficulties, for example noting that compliance visits are only fully effective in the licensed sector when the relevant individuals (for example the Principal Authority under the licence) are present on the premises at the time of the unannounced check. I recognise these practical issues but note that it is important for GLAA to gain an accurate picture of the actual worker experience.

I understand that the GLAA intend to increase unannounced spot checks and compliance activity as a result of the findings of their compliance strategy review. Beyond the work undertaken specifically in the regulated sectors, GLAA also conducts unannounced visits where intelligence indicates there are safeguarding issues or where a modern slavery investigation is required.

This includes increasing their investigations into allegations of the misuse of overseas workers employed by labour providers and increasing engagement with foreign governments around requirements of recruitment law.

As part of GLAA’s new strategic approach all licence holders have now been assessed as regards compliance risk. As well as taking an intelligence-led approach to investigations, GLAA will prioritise those that it sees as higher risk licence holders in 2023 to 2024 and 2024 to 2025, while supplementing the programme with dip sampling across all licensees. It is too soon for GLAA to assess the effectiveness of this approach.

Overall, I am encouraged by the GLAA’s new approach and will monitor closely the outcomes.

Recommendation 8a: Improve the range and quality of information on GLAA licence holder database

As discussed in Section 4 below, one of the DLME statutory obligations is to make an assessment of the scale and nature of non-compliance in the UK labour market. In order accurately to assess the magnitude and nature of both current and emerging threats the enforcement bodies must have access to a strong evidence base.

With this in mind the 2020 to 2021 strategy recommended that the GLAA review their licensing data with a view to improving the range and quality of information held better to support the identification of non-compliance trends and indicators of risk that may inform inspection policy.

The GLAA have made some good progress in strengthening the license holder database by way of implementation of the new Gangmaster Licensing Application Submission System (GLASS). At the time the strategy recommendation was made, work on GLASS was already in train, meaning that it was too late for the scope of the system to be changed to gather new forms of data. That said, GLASS will ensure that a case manager is now able to view all information relevant to a license holder in one central location with a summary dashboard and clear management information, rather than across multiple manual spreadsheets and systems. GLAA has told me work is ongoing to review and update the GLASS system to improve the data held. Alongside this, they have also invested in analytical capability to undertake more intelligence, strategy and policy work.

This new approach will make it easier to follow inspection process updates and outcomes, monitor developing issues and identify trends relating to a case. The benefits of this are starting to be realised within GLAA which GLAA can build upon.

I am also encouraged that GLAA is intending to invest in growing its data analyst capability to quality assure trend data within GLASS, as well as to deliver deep dives into data relating to sectors of specific concern.

Recommendation 10: embedding labour exploitation concerns in wider policymaking in the agriculture sector

Since 2019, the experience of recruiting seasonal migrant labour to support UK horticulture has brought to the fore how an uncertain policy environment coupled with a lack of robust systems in place to ensure worker protections can result in adverse unintended consequences in terms of worker welfare. It is encouraging that lessons have been learned from the 2021 and 2022 growing seasons and that initiatives both in government and the industry itself now have a much greater emphasis on safeguarding employment rights and worker welfare in the sector.

The UK’s departure from the European Union required a new scheme of support payments to replace the Common Agriculture Policy. The resulting Agriculture Act 2020 introduced a system linking farming subsidies and funding to public goods such as clean air, water, higher animal welfare standards and flood protection. The 2020 to 2021 LME strategy argued that compliance and due diligence in relation to labour regulations should also be considered a public good in this context.

Although this proposal was not taken forward, the wider issue of worker welfare in horticulture was highlighted in the independent review by John Shropshire into labour shortages in the food supply chain (John Shropshire 2023). This review itself followed a recommendation in the government food strategy (Defra 2022). I am encouraged that the issue of labour exploitation is being recognised as part of the wider agriculture policy debate. A response to the John Shropshire review was published by the previous government in May 2024^{[footnote 21]}, setting out a desired shift towards domestically sourced labour as well as towards greater automation in horticulture.

The previous government announced that the seasonal worker visa scheme would continue until 2029, and also recognised the continued need to focus on worker welfare, a point amplified by a review of this visa route published by the Migration Advisory Committee (MAC) in July 2024^{[footnote 22]}:

The current enforcement landscape for seasonal workers is fragmented and does not offer an adequate safeguard of seasonal worker rights. We recommend a more coordinated approach between the bodies currently involved in worker welfare and a clearer delineation of responsibility for each. Worker rights must also be clearly communicated to workers in their own language, and we highlight where better data can be used to strengthen monitoring and enforcement.

The MAC review also drew attention to the need for fairer work and pay for seasonal workers, more flexible visas and for the government to consider the Employer Pays Principle which would transfer responsibility for visa fees and travel costs away from migrant workers themselves to the hirers. Doing so could help reduce the scope for worker exploitation in the sector.

In the meantime, my 2023 to 2024 strategy also made recommendations in this space with the aim of all parties continuing to work collaboratively to ensure future labour supply for this sector can rely on the safeguards to which they are entitled.^{[footnote 23]}

Recommendation 11: the seasonal workers pilot

Recognising the increased non-compliance threat from changes to the UK’s immigration system in 2021, the 2020 to 2021 strategy recommended that the GLAA continue to work closely with Home Office Immigration Policy to ensure that the Seasonal Workers Pilot builds on its existing approach of incorporating prevention of exploitation within its programme.

The Seasonal Worker Pilot (SWP) began in 2019 and was designed to address future seasonal labour needs for the horticulture and poultry sectors, taking into account the availability of domestic labour versus the need for migrant labour, as well as the opportunities to mechanise, thus reducing the need for one or both types of workers. The concern of the 2020 to 2021 strategy was whether sufficient attention would be given to worker welfare within the pilot and whether GLAA, with its experience and interests in this sector, would have a sufficient voice as policy discussions evolved. The government subsequently introduced a Seasonal Worker Visa route, initially operating from 2022 to 2024 but now extended until at least 2029.^{[footnote 24]}

Initial findings from the first year of the pilot and subsequent official and media reports highlighted a variety of issues placing these workers at considerable risk (for example, charging of recruitment fees for workers in their source countries, which is prohibited under the Seasonal Worker Scheme). Issues with scheme implementation and a fragmented enforcement regime have contributed to the risk to this. The scheme operators are responsible for the welfare of the workers they bring to the UK and place on farms; however, the workers are employed by the farms. Oversight of visa enforcement is the responsibility of UK Visas and Immigration in Home Office (including around worker pay, otherwise the responsibility for HMRC NMW). Scheme operators are required to hold a GLAA licence, but GLAA has no formal role in ensuring compliance for workers at the farm level as the farms employ the workers directly, not via an agency holding a GLAA licence. So, enforcement gaps can open for those who wish to exploit those workers.

Responsibilities of scheme operators as regards monitoring workers’ welfare box 3.2

Box 3.2: responsibilities of scheme operators as regards monitoring workers’ welfare

GLAA has been able to intervene is by:

• sharing a core brief with FCDO posts in recruiting countries and building liaison with the relevant authorities in those countries. This has assisted in ensuring that international authorities prioritise proactive contact with our embassies/UK authorities on any identified concerns relating to the programme
• GLAA officers making targeted visits to those on the seasonal workers scheme to provide a presentation on what the workers should expect, including how they should receive pay and how it should be calculated. GLAA are also carrying out ongoing work to upskill license holders on due diligence, as well as to examine any sub-contract relationships and recruitment country conditions

Scheme improvements relating to enforcement (UK Visas and Immigration (UKVI) and worker welfare (Department for Environment Food and Rural Affairs (Defra)) have been introduced for 2023, and the indications are that the workers’ experience has improved. However, the ongoing challenge is to ensure the various government and industry stakeholders can work together well enough to iron out other problems as they arise. My strategy for 2023 to 2024 made recommendations here. GLAA should continue to play a central role in this, and its voice and expertise should be prominent in both future policy design and selection of scheme operators.

3.3.2 Recommendations in progress

Recommendation 6: GLAA to work closer with industry certification schemes to help improve compliance throughout the agriculture supply chain and reduce the need for multiple audits

(Noted but not formally assessed in Annex B as the deadline for delivery in December 2024).

Recommendation 6 foresaw closer working by the GLAA with industry high quality certification schemes for growers to help improve compliance throughout the agriculture supply chain. Coupled with a strengthened licensing system for labour providers in the sector, the 2020 to 2021 strategy argued that this would result in greater confidence throughout the supply chain and help overcome the sometimes-poor standard ethical compliance audits.

GLAA told me that no specific work had been taken forward here, though it had previously had in place a Retailer’s Protocol, which brought many of the key stakeholders together.

GLAA has since moved away from pursuing a protocols approach, partly due to refocusing its efforts through its own new strategy for 2023 to 2026, but also in the belief that the sectors themselves are better placed to progress this sort of initiative. Closer partnership between regulators, trade bodies and industry are again a theme of my strategy for 2023 to 2024 where I welcome ongoing initiatives in all areas, including agriculture/horticulture.

3.3.3 Recommendations out of scope of this report

Recommendations 8b and 8c: Using GLAA’s own licensing data to more effectively assess risk in agriculture

The strengthening of the GLAA’s stakeholder database (Rec 8a – discussed above) was seen as the first stage of a longer-term development of data collection and analytics for the SEB. In particular the 2020 to 2021 strategy recommended that a review of GLAA’s licensing data should consider a more innovative approach to data and analytical functions in the SEB (Rec 8b) and be fully integrated into the SEB’s data capability (Rec 8c).

The lack of progress regarding the creation of a SEB means that this work has yet to be taken forward and so these recommendations are considered out of scope for assessment in this report. Going forward, they may be relevant for the Fair Work Agency.

Recommendation 9: Improve understanding of labour exploitation and the effectiveness of enforcement across the labour market

Again, with the SEB in mind and mirroring a similar recommendation made for hand car washes (see Recommendation 18 below), the 2020 to 2021 strategy recommended the enforcement bodies work more closely with academics and the Joint Slavery and Trafficking Analysis Centre (JSTAC) better to understand the journey of exploited workers and where interventions can best be made. It recommended that the findings be fed into the communication and engagement strategy for the enforcement bodies. Although the specified timescale was by December 2023 the recommendation was also linked to SEB development. This work has yet to commence.

3.4 Construction

Construction is a large and complex sector, made up of a variety of trades and many subsectors of activity. Establishing a clear picture of the scale and nature of non-compliance across the whole sector is therefore more challenging. The 2020 to 2021 strategy identified a number of non-compliance issues, such as unlawful pay deductions or failure to pay for personal protective equipment, concerns around health and safety and tax fraud risks, and at the extreme end, some cases of serious labour abuse and modern slavery.

Work by the ODLME Strategic Co-ordination Group (SCG) is currently underway to improve our understanding of labour risk within sub-sectors of construction. It is clear from our discussions with the enforcement bodies that the sub-sectors within construction (large vs small sites, one-off jobs such as tarmacking or roofing work, house renovations, demolition etc) where they are encountering non-compliance issues differ markedly.

3.4.1 Recommendations due in the period of this report

Recommendation 12b: the Construction Protocol

In the 2020 to 2021 strategy, Matthew Taylor highlighted the GLAA Construction Protocol (launched in October 2017) as a useful tool in raising awareness around the issues of non-compliance in the construction sector and recommended that the enforcement bodies continue to build on this protocol. The protocol is thought to have delivered some benefits in terms of workers being more willing to report non-compliance but overall, the outcomes have been difficult to measure.

Now that sufficient information has been shared under the protocol to encourage the sector to take a proactive role in tackling non-compliance, GLAA believes the resource consumption required to support the protocol is no longer proportionate to the benefits.^{[footnote 25]} As a result, the GLAA are moving to support industry led initiatives in which they can provide strategic oversight, disseminate best practice and provide opportunities for cross-sector fertilisation.

Within its strategy for 2023 to 2026 GLAA has defined a new set of control strategy priorities, where, due to the lack of information received on threats in the sector, construction has become a lower priority. GLAA assure me that, despite this, they have robust processes and systems in place to identify any emerging trends in the sector.

I encourage the enforcement bodies and the ODLME to continue their joined-up working approach within the SCG, to deliver work targeting supply chains, as well as to deliver geographical enforcement programmes which encompass construction businesses across the UK.

Recommendation 12(b) also recommended that the enforcement bodies work to develop the evidence base around the construction sector. Work undertaken by HMRC has helped improve matching between their classifications systems for businesses and the sectors with a high OLDME non-compliance risk score.

I encourage all 3 enforcement bodies meantime to continue to look for ways to support the ODLME to build the evidence base and risk assessment around the construction sector.

Recommendation 13: provision of information on labour exploitation to property owners

The 2020 to 2021 strategy recommended that GLAA should explore how to provide information to property owners when planning permission is granted for construction work on the signs of labour exploitation and how to report concerns.

GLAA told me that this work is currently not a priority for them (see above), as the focus of their work in the construction sector is currently around engagement with the bigger companies in the sector. Furthermore, GLAA highlighted that this work would need to carry out in conjunction with local authorities and the Local Government Association.

Recommendation 14: promotion of instances of good practice

In both construction and other high-risk sectors, the 2020 to 2021 strategy recommended the promotion of good practice in cases where major brands had successfully identified and taken successful action against severe labour abuse within their supply chains. Not only would this publicity help raise awareness across the sector but could also deter similar abuses happening elsewhere.

Initiatives such as the Construction Protocol were believed to helped to disseminate good practice, but the objective of this recommendation was to go a step further to understand better what industry led interventions worked and could therefore be applied more widely.

All companies are at risk of finding worker exploitation, even modern slavery, within their supply chains. Giving credit to companies who have been diligent and have taken prompt action to address the issues sends a strong message. However, my discussions with the enforcement bodies highlighted the considerable barriers they would face in taking forward such an approach. Recognising these barriers at the time the recommendation was made; it was suggested the SEB could explore how to overcome these. Reflecting on the feedback from the enforcement bodies I will further consider what action might be taken.

Recommendation 15: systematic reviews of the extended labour supply chain

Recommendation 15 called upon the enforcement bodies, when they find severe labour exploitation in construction and other high-risk sectors, to undertake systematic reviews of extended labour supply chains. This could help identify further vulnerabilities within the supply chain (Recommendation 15a). Using this information, the enforcement bodies could then inform and educate those organisations in the supply chain about weaknesses in their systems (Recommendation 15b), as well as identify organisations where there is repeated failure of expected levels of due diligence (Recommendation 15c). It was then hoped a SEB would provide the necessary powers to be able to impose penalties.

To date there has been little progress made against this recommendation. Specifically, HMRC NMW told me they felt they did not have the powers to undertake this type of intervention. More generally, construction is large and complex and remains an area where a better understanding of the non-compliance picture is needed. Some work has been undertaken by the SCG to build up a more robust picture of the landscape of the sub-sectors of construction but more remains to be done.

The opportunity remains though for more work here, though I recognise the resource commitment required to do so.

3.4.3 Recommendations out of scope of this report

Recommendation 12a: single enforcement body sectoral approach

Matthew Taylor had recommended that Home Office and DBT, in partnership with ODLME, should investigate a sectoral approach into the design of the SEB to bring together enforcement bodies and wider stakeholders to develop ways of identifying, analysing, mapping and effectively tackling non-compliance in particular industries.

Although progress on establishing the SEB stalled under the previous government and no work was done in relation to this recommendation, the SCG continues to find it useful to pursue a sectoral approach in its work.

3.5 Hand car washes

The 2020 to 2021 strategy highlighted the hand car wash (HCW) sector as having a severe risk of labour exploitation. Factors that have had an impact include the supply of low-cost labour from Eastern Europe. Stakeholder evidence at the time indicated that Romanian and Bulgarian workers made up more than half of the HCW labour force, but there were also reports of irregular migrants finding work from Albania and the Middle East. Following Brexit, there has been a noticeable shift away from EEA nationals working in this sector.

The increased availability of disused sites, such as pubs, garage forecourts, supermarket carparks and wasteland, has allowed the HCWs to thrive and displace many traditional mechanised car washes, especially along arterial roads.

The 2020 to 2021 strategy made 4 recommendations related to HCWs.

3.5.1 Recommendations due in the period of this report

Recommendation 16: local authority pilot scheme to test compulsory licensing

My predecessor had proposed a mandatory licensing scheme for the hand car wash sector, which would aim to tackle a range of non-compliance issues, including potentially some beyond the remit of the labour enforcement bodies (for example, environmental impacts). Before doing so, however, it was recognised that further work was needed to test out whether an industry-led voluntary accreditation approach could achieve the necessary improvement in compliance.

To this end, with funding support from the Home Office, the Responsible Car Wash Scheme (RCWS) undertook 2 pilot schemes in 2021 to 2022. These involved a voluntary accreditation scheme aimed at raising standards and promoting compliance in the hand car wash sector. These pilots are complete, and comprehensive evaluation reports were submitted to Home Office in September 2022. Overall, the pilots found that a voluntary accreditation approach would likely fall short as regards improving compliance. In March 2023 the RCWS closed on the basis that had not proved effective in raising standards.

ODLME risk modelling continues to identify hand car washes as a high-risk sector. We currently await a steer from Home Office as to proposed next steps for tackling non-compliance in this sector and whether further local pilots testing compulsory licensing will be taken forward. Meantime GLAA is exploring a further pilot exercise with one local authority.

Recommendation 17: using technology to identify risk

In terms of making greater use of innovative, predictive analytics, the enforcement bodies are actively looking to build on initial work carried out by academics at Nottingham Trent University (NTU) using Google Streetview technology to map hand car wash locations across England and analyse associated non-compliance risk factors.^{[footnote 26]} HMRC NMW has made good use of the mapping NTU has carried out to date and ODLME’s SCG has been currently exploring options for further work here, as part of its operational focus on high-risk sectors including hand car washes. HMRC NMW is considering predictive analysis techniques to link risks of non-compliance with demographic indicators.

Recommendation 18: work with academics and JSTAC to fill key evidence gaps

The 2020 to 2021 strategy highlighted the need for the enforcement bodies to undertake analysis and work in partnership with academics and the Joint Slavery and Trafficking Analysis Centre (JSTAC) to fill key evidence gaps in understanding labour market non-compliance and the effectiveness of enforcement.

As discussed above, the enforcement bodies have been working with Nottingham Trent University to map out car wash locations across the country and consider related socioeconomic risk factors. As well as helping to identify actual volumes and locations of hand car washes in operation, the mapping initiative will enable the enforcement bodies to understand where the greatest risk sits geographically, as well as to inform a risk scoring system.

Recognising there are budgetary pressures, I encourage HMRC NMW and the GLAA to continue their work to explore funding opportunities for expanding this mapping initiative to new areas, including London and the Southeast, to provide a more complete picture of the scale of the hand car wash sector.

Additionally, I am pleased to note that the GLAA, in collaboration with law enforcement and the NCA (encompassing JSTAC), successfully carried out an intensification project (Project Aidant) which involved visits to over 180 HCWs in June 2022 to investigate labour exploitation, labour abuse and modern slavery. In almost two-thirds of these visits (65%) non-compliance was identified. One of the features of the HCW sector is the use of workers who do not have the right to work in the UK. These workers do not have employment rights or any recourse to enforcement.^{[footnote 27]} As of the time of writing, GLAA has 6 Slavery and Trafficking Risk Orders (STROs) in the HCW sector.

Over the last 6 years ODLME risk assessment of this sector has evolved recognising not only the potential for severe labour exploitation and modern slavery, but also widespread lower-level non-compliance (for example, minimum wage violations). It is also the case that despite relatively high volumes of modern slavery reports made by NGOs to the GLAA, very few result in a formal referral into the National Referral Mechanism (NRM) (or, indeed, lead to a Duty to Notify report in cases where potential victims of modern slavery do not wish to be referred into the NRM).

The 2020 to 2021 strategy therefore recommended that the enforcement bodies and wider law enforcement should seek to better understand why so few referrals result in the identification of modern slavery offences, to help achieve a more efficient use of their resourcing.

The GLAA highlight the original issue as pertaining to the number of cases meeting the threshold for prosecution, rather than the number of referrals initially identified. Therefore, I am encouraged to hear of concerted efforts by the GLAA to engage with intelligence teams to further consider the information gathered, streamline the data recorded and work with clients to help them in understanding what information to provide. For instance, GLAA developed 6 videos to help the public understand what intelligence is, what GLAA can do compared with other enforcement bodies and how to report to them. The quality of actionable intelligence has improved and with that the prospect of investigations leading to prosecutions.

Recommendation 19: working with NGOs active in the HCW sector

The 2020 to 2021 strategy recommended that the GLAA and HMRC NMW should work more closely with NGOs who are active in the HCW sector to improve the quality of the information and intelligence relating to non-compliance in hand car washes.

I am pleased to see that the enforcement bodies are taking a proactive approach to engaging with NGOs active in the HCW sector, for example the Clewer Initiative, the Responsible Car Wash Scheme and the Modern Slavery Helpline. However, I am aware that engagement with some of these initiatives has produced mixed results as regards useful information/intelligence.

HMRC NMW had in part been using data from Clewer’s Safe Car Wash App to identify non-compliance, the quality of the information was limited as, originally, the app itself captured the location of where the report itself was made rather than the location of the HCW. These 2 locations may be miles apart. As a result, the HCW is only identifiable if the detail matches up with a registered business in the area reported and so, in many cases, ghost businesses fall through the gaps. Clewer are seeking new sponsors for this activity, including its further development, and I understand, are in discussion with a potential new sponsor. I welcome this.

Additionally, I welcome the internal analysis commissioned by the GLAA to identify patterns in the severity of HCW issues reported through the Safe Car Wash app, as well as to consider how exploitation can be most efficiently assessed and reported. The GLAA has also worked to promote the app through billboard campaigns operated in Leicester, Norwich, and Ipswich. Furthermore, the GLAA was an integral partner supporting the work of the industry-led Responsible Car Wash Scheme.

I am aware that much of information received by the GLAA through the app does not meet the threshold to pursue enforcement action. However, I am hopeful that upcoming changes delivered by the Clewer initiative, in collaboration with the GLAA and Modern Slavery Helpline, to improve the parameters of the data captured will create a more targeted approach.

Section 4: ODLME information hub activities 2020 to 2023

4.1 Introduction

In addition to delivering an annual Labour Market Enforcement Strategy and Annual Report, the 2016 Immigration Act requires an Information Hub where^{[footnote 28]}:

The Director must gather, store, process, analyse and disseminate information relating to non-compliance in the labour market.

In practice the Information Hub draws on the analytical expertise – from both the intelligence world and social sciences – to help provide a more complete picture of labour market non-compliance within my remit. The hub is currently staffed by 3 FTE, half the number in 2019 to 2020.

This section of the annual report provides an update on the hub’s activities since 2020. In particular the focus is on 2 key areas of work: strengthening the ODLME risk model and commissioning a major research project to evidence better the scale and nature of non-compliance in the labour market.

4.2 Developing the ODLME risk model

The ODLME risk model has been an integral part of the annual LME strategy, helping to identify those areas of the labour market at particular risk of non-compliance. Based on the MoRiLE5 methodology (a police methodology which assesses crime risk, harm and likelihood) the ODLME risk model has been adapted to measure the risk of labour non-compliance for the worker. This is because some of the original scoring across different crime types such as for physical and financial harm, does not provide sufficient granularity to compare different industry sectors when assessing labour non-compliance.

The factors affecting risk are multi-dimensional, but ODLME follows a primarily sectoral approach on the basis that structures and business models – which often contribute to labour market non-compliance - can vary across sectors. Adopting a sectoral approach is also consistent with the approach used by the 3 enforcement bodies for measuring and comparing complaints, intelligence and data.^{[footnote 4]}

The risk assessment considers several criteria, but the overall risk level is based on different types of business behaviour which occur over a 5-point spectrum ranging from error to modern slavery, as follows:

• A (includes a proportion of Modern Slavery)
• B (deliberate non-compliance)
• C (serious non-compliance)
• D (interpretation, non-compliance)
• E (error)

The model also takes into account the number of compliance and enforcement interventions by the 3 ODLME enforcement bodies under my remit, and assessment of the risks and threats from wider enforcement agencies. This can present a challenge for weighting between the different bodies given that the enforcement bodies conduct their own assessments of risk of non-compliance against the legislation which they enforce. As they have quite different underlying processes and responsibilities (such as licensing) direct comparison of their risk assessments is difficult. They also have different levels of resources available to them which impacts on their ability to intervene and on the type and volume of interventions they undertake.

ODLME continues to look to enhance the risk model and increase our measurement of the scale and nature of non-compliance. As noted under Section 2.2 above, one area in particular ODLME is looking to develop the risk model is to capture better emerging and future risks.

4.3 Improving estimates of labour market non-compliance

As previous LME Strategies have explained our knowledge of the non-compliance across the UK labour market threat remains imperfect. ODLME has sought to fill some of this gap using proxy measures and relevant research, but this still falls short of the information needed for me to make the assessment of the scale and nature of non-compliance, as required by the 2016 Act.

In an attempt to fill this gap ODLME commissioned preparatory work in 2019 and 2020 to identify a suitable methodological approach to undertake a research study in this area.

Co-funding was then secured from the Economic and Social Research Council (ESRC) and the Department for Business and Trade which allowed ODLME to run an Invitation to Tender in December 2021 to commission a large-scale research study into the scale and nature of labour market non-compliance in the UK.

A consortium led by University College London, involving a multidisciplinary research team from UCL and the University of Gloucestershire, supported by FLEX (Focus on Labour Exploitation) launched the new study in June 2022.

The project^{[footnote 29]} is an innovative mixed-methods study focusing primarily on people in precarious work, who, it is estimated, comprise around one in ten of the UK’s workforce, and who are considered to be at particular high risk of labour market abuse.

The project will include is a large-scale, representative survey, which will be administered by Verian (formerly Kantar Public) as an associated study to the Understanding Society Survey: the largest household survey in the world. The survey results pertaining to the UK will then inform complementary in-depth interviews with people in precarious work and focus groups with workers and employers.

Labour market non-compliance and related labour market abuse involve complex and wide-ranging issues. Project work to date has therefore involved extensive survey development, focusing on survey conceptualisation and operationalisation. This has been achieved working in close collaboration with diverse stakeholders who have been consulted in depth through 6 project advisory groups comprised of: legal experts; labour abuse academics; policymakers and practitioners; worker rights representatives; employer representatives; and – crucially – people in precarious work themselves. Their input has been vital to produce a viable survey instrument that accurately reflects the complex legal and social realities of labour market non-compliance.

Using experts at UCL the research team will also conduct a longitudinal analysis of people’s trajectories through precarious work, which will inform the delivery of the final survey.^{[footnote 14]}

The project aims to capture data through a full survey, to be conducted in early 2025, and qualitative interviews and desk research, to be concluded in Summer 2025. The completion of the project, in the form of a final report, is expected by the end of 2025.

Delivery of the project has been delayed by various factors substantially outside ODLME control. Most recently, rollout of the pilot survey by Verian, originally scheduled for spring 2024, was postponed to autumn 2024, due to the rules of government research during the pre-election period. This rescheduling has had knock on effects to subsequent aspects of the work.

Section 5: concluding remarks

The third annual report published by the ODLME covers 2 strategies: the 2020 to 2021 and the 2021 to 2022 strategies delivered by Matthew Taylor during his tenure as interim Director of Labour Market Enforcement. These were submitted to government in March 2020 and January 2021 respectively. Delays in clearance resulted in publication of both strategies only in December 2021. Timescales for implementation were specified as 1,2 or 3 years after publication.

Due to limited time between my appointment and the statutory deadline for submitting the strategy, my interim strategy for 2022 to 2023 reviewed and reinforced what I believed were the key recommendations made by Matthew Taylor. I did not make any additional recommendations.

The issues and recommendations raised by the 2020 to 2021 and 2021 to 2022 strategies require time to make progress. This annual report provides an assessment of progress: 33 of the total 41 whole and part recommendations due to be implemented by the end of 2023 have been assessed here. A further 4 recommendations – all from the 2020 to 2021 strategy – are still in progress and are not due to be implemented before the end of 2024. The remaining recommendations were either related to progress on delivering the previous government’s commitment to establish a single enforcement body for worker rights, where further activity has been paused, or, in one case, was rejected by government.

Notable progress has been made by the enforcement bodies working together via ODLME’s Strategic Coordination Group (SCG) to identify and tackle non-compliance in at-risk sectors. We have seen benefits in joint operational working, first with Operation Tacit (in the garment sector) and now with Operation Topaz (care sector). I am encouraged how lessons learned from each are helping to shape further development of joint activity. Joined up thinking which goes beyond joint operations are essential. The enforcement bodies working together can add extra work for some, but it can also balance resources and support compliance and enforcement in other areas.

There is a significant role for the LME Board to provide joined–up strategic direction, examining the risks and ensuring priority areas of non-compliance are tackled efficiently and effectively.

Supporting all of this is a risk model developed by the ODLME Information Hub, again working closely with the enforcement bodies. There is still much to do in the face of existing and emerging non-compliance threats to further develop this, and my strategy for 2023 to 2024, published in October 2023 makes recommendations for more work in this direction.

At the time Matthew Taylor’s strategies were produced the UK was facing serious socio-economic challenges including the COVID-19 pandemic, the simultaneous change in the UK’s immigration system following Brexit and then subsequently the cost of living crisis. This uncertain climate has, in particular, affected many low-skilled sectors, already experiencing non-compliance risks, but now adjusting to different labour demand and supply pressures. We must advocate for policy developments to have safeguards built in to provide sufficient protections for workers. The Make Work Pay agenda is the present government’s response.

The growing risk of online recruitment scams and fraudulent jobs is evolving and complex. This is an example of where we therefore need timely and good quality evidence, properly to identify and address these threats. Industry-led initiatives are welcome, especially where the scale of the threat is larger than the remit of any single enforcement body pointing to the need for a wider joined up government response.

That concept of wider thinking and action is also needed Non-compliance in many sectors goes well beyond worker rights and as such requires a combined response to overcome apparent gaps in enforcement.

Working with businesses, sector representative groups, unions and other key stakeholders remains an important part of the approach to improve employer awareness of, and compliance with, employment rights. Not only has there been an increased focus on producing better, clearer and more timely guidance, but the enforcement bodies are now working together much more closely to communicate to employers, for instance via joint webinars.

Raising awareness with public sector stakeholders – for instance, with other regulators and with local authorities to address non-compliance in the care sector – remains a key objective.

Effective communications with workers or those training to go into the workplace is also of utmost importance, and I applaud the various initiatives being taken by enforcement bodies working imaginatively with each other and with unions, ACAS, NGOs and community groups to get their messages into the public domain.

Working with business, ensuring workers are well informed, joined up thinking and comprehensive information sourcing are the focus of recommendations made in my LME strategies for 2022 to 2023 (published in March 2023) and for my strategy for 2023 to 2024 (published in October 2023). Much of this report was prepared before the change in government in July 2024. Since then, there is renewed impetus in establishing a Fair Work Agency as part of the wider Make Work Pay agenda. The issues discussed above remain highly relevant as labour market compliance and enforcement policy moves forward over the coming years.

In conclusion, I wish to pay tribute to the continued dedication of those working within the 3 enforcement bodies HMRC NMW, EAS and GLAA backed by their 2 sponsor departments - the Department for Business and Trade and the Home Office – in their mission to protect vulnerable workers. I recognise the pressures that you face and your commitment. Thank you for the work you all have undertaken implementing these strategy recommendations and, for your continued engagement with myself and with the DLME Office.

Finally, I would like to acknowledge the hard work of all those who have contributed to this Annual Report, especially to my colleagues in the ODLME (Doris Allende, Mark Birch, Michael Flynn, Tim Harrison, Alison Smith, Jessica Sterling and James Wignall.) We too have faced resource pressures which have contributed to delay in the production of the report. But it has also allowed us to draw a bigger picture covering a 3-year period.

Annex A: recommendations due in the period of this report

2020 to 2021 recommendations

Recommendation 2

DBT with support of HMRC NMW should continue to improve guidance around national NMW / NLW, in collaboration with stakeholders, by:

• updating guidance promptly following any significant legal or policy developments, and proactively disseminating this in a timely manner with a publicity campaign to reach both workers and employers

Rating: Implemented

Time scale: by December 2022

Lead body: HMRC NMW and DBT

Sector theme: Social care

DBT with support of HMRC NMW should continue to improve guidance around national NMW / NLW, in collaboration with stakeholders, by:

• re-examining developing sector-specific guidance to address complexities in NMW guidance for those industries where the nature of work is atypical, including (but not limited to) social care

Rating: Rejected

Time scale: by December 2022

Lead body: HMRC NMW and DBT

Sector theme: Social care

Recommendation 3a

The LME bodies should work closely with external partners, particularly within high-risk sectors, to find innovative ways to disseminate information and raise awareness on employment rights and enforcement among employers and workers.

Specifically, within social care:

a. the LME bodies should bring together an information pack of employer obligations for local authorities to pass on to those receiving direct payments for care needs

Rating: Good progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Social care

Recommendation 3b

The LME bodies should work closely with external partners, particularly within high-risk sectors, to find innovative ways to disseminate information and raise awareness on employment rights and enforcement among employers and workers.

Specifically, within social care:

b. the LME Bodies should target the dissemination of information resources for workers, including via skills providers, Skills for Care, and / or devolved worker registration schemes at the point of certification or training

Rating: Some progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Social care

Recommendation 4

The LME bodies should identify ways to actively and effectively support local authorities in their due diligence and monitoring of externally commissioned services with focus on workers’ rights.

Specifically, for social care, the LME bodies should consider the following methods but may find other ways of achieving the same aim:

a. to develop a good practice guide that local authorities can easily incorporate into their procurement processes

b. raise awareness within local authorities of the enforcement bodies’ powers, regulations, and common breaches to ensure a greater flow of intelligence and appropriate referrals where non-compliance is suspected

Rating: Some progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Social care

Recommendation 5

I recommend that DBT and Home Office (HO) work closely with DHSC to ensure social care reform includes consideration of worker rights and enforcement, building on learning from the variability in social care models within the UK.

Rating: Some progress

Time scale: by December 2023

Lead body: DBT and HO

Sector theme: Social care

Recommendation 7a

GLAA and Home Office should review the licensing system and budget to include increased compliance inspections and routine visits.

Rating: Some progress

Time scale: by December 2023

Lead body: HO and GLAA

Sector theme: Agriculture

Recommendation 7b

GLAA and Home Office should evaluate the effectiveness of increased use of unannounced visits as agreed from the 2019 to 2020 strategy.

Rating: Little progress

Time scale: by December 2023

Lead body: HO and GLAA

Sector theme: Agriculture

Recommendation 8

The GLAA should review licensing data: what is collected, how it is analysed and how it is shared.

a. In the immediate term: the GLAA should strengthen the licence holder database to improve the range and quality of information held, and to identify trends and indicators of risk to inform inspection policy, including the characteristics of licence holders and correlations with risks of non-compliance.

Rating: Some progress

Time scale: by December 2023

Lead body: GLAA

Sector theme: Agriculture

Recommendation 10

I encourage the GLAA and Home Office to engage with DEFRA to consider the scope to address concern about workers’ rights by including labour protection compliance as part of the relationship between the new farming subsidies systems and the protection of labour rights.

Rating: Little progress

Time scale: by December 2023

Lead body: GLAA and HO

Sector theme: Agriculture

Recommendation 11

GLAA should continue to work closely with Immigration Policy to ensure the Seasonal Workers Pilot builds on its existing approach of incorporating prevention of exploitation within its programme.

Rating: Good progress

Time scale: by December 2022

Lead body: GLAA

Sector theme: Agriculture

Recommendation 12

b. In the interim, the enforcement bodies should build on the Construction Protocol and ODLME will support work to develop the evidence base around the sector. Learning from this would then inform the development of the Single Enforcement Body.

Rating: Some progress

Time scale: by December 2022

Lead body: All bodies with ODLME

Sector theme: Construction

Recommendation 13

GLAA should explore how to provide information to property owners when planning permission is granted for construction work on the signs of labour exploitation and how to report concerns.

Rating: No progress

Time scale: by December 2023

Lead body: GLAA

Sector theme: Construction

Recommendation 14

Both in construction and in other high-risk sectors, the enforcement bodies should increase their promotion of instances of good practice where a brand/household name has identified and taken successful action against severe labour abuse within their supply chain. This is both to publicise the work within the industry and increase the deterrent effect. Development of the SEB should be mindful of existing barriers that might prevent the current enforcement bodies from doing this.

Rating: No progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Construction

Recommendation 15

Across sectors, where the LME bodies identify severe labour exploitation, there should be an automatic and systematic review of the extended labour supply chain to:

a. identify vulnerabilities and potential wider exploitation related to the initial case

b. inform and educate the organisations in the supply chain about weaknesses in their systems

c. identify organisations where there is repeated failure of expected levels of due diligence

Rating: No progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Construction

Recommendation 16

The local authority pilot scheme being developed by Responsible Car Wash Scheme (RCWS) (in the New Year 2021) should be used to explore and test the effectiveness of compulsory licensing across the whole HCW sector. The Home Office should support the pilot through funding and independent evaluation, and if the model is found to be successful, it should be rolled out nationally.

Rating: Some progress

Time scale: by December 2023

Lead body: BEIS, HO and GLAA

Sector theme: Hand car washes

Recommendation 17

Recognising existing work by HMRC NMW, all enforcement bodies should explore the opportunities to make greater use of innovative technologies such as predictive analytics to complement existing enforcement efforts to identify areas of risk, together building up expertise to feed into the SEB.

Rating: Some progress

Time scale: by December 2023

Lead body: All bodies

Sector theme: Hand car washes

Recommendation 18

As per recommendation 9, the LME bodies should undertake analysis and work in partnership with academics and JSTAC to fill key evidence gaps in understanding labour market non-compliance and the effectiveness of enforcement. This will be especially important to feed into the SEB development.

Specifically, the enforcement bodies and wider law enforcement should seek to better understand why so few referrals result in the identification of modern slavery offences, to help achieve a more efficient use of their resourcing.

Rating: Some progress

Time scale: by December 2022

Lead body: HMRC NMW and GLAA

Sector theme: Hand car washes

Recommendation 19

GLAA and HMRC NMW should work more closely with NGOs who are active in the HCW sector, such as the Safe Car Wash app and the Modern Slavery Helpline, to improve the quality of the information and intelligence relating to non-compliance in hand car washes.

Rating: Good progress

Time scale: by December 2022

Lead body: HMRC NMW and GLAA

Sector theme: Hand car washes

2021 to 2022 recommendations

Recommendation 1

I recommend that the enforcement bodies, together with the ODLME Information Hub and external experts, continue to develop the risk model, including widening the information sources used and improving the robustness of the data. This evolving model should feed into the development of the Single Enforcement Body’s approach to assessment and prioritisation of risk. The assessment should be reviewed every 6 months.

Rating: Good progress

Time scale: Ongoing with bi-annual review

Lead body: All bodies with ODLME

Sector theme: Risk modelling

Recommendation 2

I recommend that the enforcement bodies should work with ODLME through the Strategic Coordination Group (SCG) to adopt a more strategic, sector-based joint-working approach to tackle non-compliance in high-risk industries. A 2-year programme of work should be developed with appropriate interim milestones, to commence at the beginning of the 2021/22 financial year. The learning and progress from this programme of work will feed into developing an effective sectoral approach for the SEB.

Rating: Some progress

Time scale: by December 2023

Lead body: All bodies with ODLME

Sector theme: Sector-based approach

Recommendation 3a

To monitor and mitigate the potential risk to workers related to a changing labour market, I recommend that both HMRC NMW and EAS are given the resource and ability to utilise more timely and impactful communication approaches.

Rating: Good progress

Time scale: by end of 2021

Lead body: HMRC NMW and EAS

Sector theme: Managing compliance risks from changes in the labour market

Recommendation 3b

To monitor and mitigate the potential risk to workers related to a changing labour market, that all 3 bodies seek to overcome current intelligence and information gaps by maximising the use of new and alternative data sources (for example from fraud investigations into the Coronavirus Job Retention Scheme) to identify potentially non-compliant employers.

Rating: Some progress

Time scale: by 2022

Lead body: All bodies

Sector theme: Managing shared challenges

Recommendation 4

To support the 3 bodies in dealing with shared challenges and rapid changes ahead, I recommend that the heads of HMRC NMW, GLAA and EAS convene, with coordination from the ODLME, to identify issues of common concern and to find joint solutions wherever possible. This forum could address issues such as resourcing, use of innovation, training and operational cultures, and potentially involve time-limited and measurable workstreams.

Rating: Some progress

Time scale: to commence by the beginning of the 2021 to 2022 financial year

Lead body: All bodies with ODLME

Sector theme: Managing shared challenges

Recommendation 5a

To better understand and develop ways of tackling heightened risks in online recruitment, I recommend that DBT and EAS, working with the recruitment industry and JobsAware (formerly SAFERJobs), explore how they can better use innovative technologies to identify fake and fraudulent jobs advertised online; that DBT and EAS, working with the recruitment industry and JobsAware (formerly SAFERJobs), explore how they can better use innovative technologies to identify fake and fraudulent jobs advertised online.

Rating: Some progress

Time scale: by the end of 2021 to 2022 financial year

Lead body: DBT and EAS

Sector theme: Online recruitment

Recommendation 5b

To better understand and develop ways of tackling heightened risks in online recruitment that BEIS:

(i) prioritise the completion of the review of online recruitment accepted from the 2019 to 2020 LME Strategy to evidence better the online harms threat and

(ii) feed the findings into broader government and industry discussions around regulating online activity, with a view to identifying practical safeguards and remedies for jobseekers affected by this threat

Rating: Little progress

Time scale: by the end of 2021 to 2022 financial year

Lead body: BEIS

Sector theme: Online recruitment

Recommendation 6a

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, I recommend that a strategic oversight group be established involving relevant government departments and enforcement agencies focusing on the potential labour market enforcement implications arising from the new immigration system. To be implemented by the end of June 2021, before the deadline for applications for the EU Settlement Scheme.

Rating: No progress

Time scale: By end of June 2021

Lead body: HO

Sector theme: Immigration and labour market enforcement

Recommendation 6b

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, DBT commit to regular and ongoing monitoring of the impact of the new immigration system on labour market compliance, building on existing structures such as the Vulnerability Advisory Group. In addition, there should be an independent evaluation of these, impacts after 18 months of the new system.

Rating: Little progress

Time scale: Monitor monthly. Report by the end of 2022

Lead body: HO and DBT

Sector theme: Immigration and labour market enforcement

Recommendation 6c

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, that Home Office and BEIS, working with the enforcement bodies, should review the interaction between labour market and immigration enforcement to ensure sufficient protections for migrant workers and improve intelligence flows via safe reporting structures. This should feed into development of the SEB.

Rating: Little progress

Time scale: By end of 2021 to 2022 financial year

Lead body: HO, DBT and enforcement bodies

Sector theme: Immigration and labour market enforcement

Recommendation 7a

The labour market enforcement bodies should urgently act to mitigate the labour exploitation risks of the new immigration system. For all 3 bodies, I recommend that they identify sectors and locations with high numbers of European Economic Area (EEA) migrant workers and issue communications targeting both workers and employers to raise awareness about the immigration changes.

Rating: Some progress

Time scale: By mid-2021

Lead body: All bodies

Sector theme: Immigration and labour market enforcement

Recommendation 7b

The labour market enforcement bodies should urgently act to mitigate the labour exploitation risks of the new immigration system. For all 3 bodies, I recommend that they better monitor emerging risks from the new immigration rules to be able to respond in a timely manner, by increasing their working with:

(i) other enforcement bodies and

(ii) third-party organisations (such as unions, NGOs)

Rating: Some progress

Time scale: Start from 2021 to 2022 financial year

Lead body: All bodies

Sector theme: Immigration and labour market enforcement

Annex B: recommendations still in progress

2020 to 2021 recommendations

Recommendation 1

The Labour Market Enforcement (LME) bodies should strengthen their relationship with care regulators across the devolved administrations by:

a. raising their profile and ensuring their powers and remit are well-known in the sector

b. Providing active support in the training of inspectors, enabling them to spot the signs of labour exploitation

c. Reviewing existing gateways and processes to ensure smooth intelligence-sharing and referrals between the LME bodies and the care regulators, including effective signposting to each other’s complaints/whistleblowing routes

Timescales: December 2024

Lead body: All bodies

Sector / theme: Social care

Recommendation 6

In line with my wider argument around robust voluntarism, the Gangmasters and Labour Abuse Authority (GLAA) should work with the sector to explore how it can lend credibility and support to the labour standards and compliance elements of high-quality certification schemes for growers. Working with a strengthened licensing system, this would allow the sector to be more confident about compliance throughout the supply chain, without relying on multiple, sometimes poor standard ethical compliance audits.

Timescales: December 2024

Lead body: GLAA

Sector / theme: Agriculture

Annex C: recommendations out of scope – related to creation of the Single Enforcement Body (SEB)

2020 to 2021 recommendations

Recommendation 8

The GLAA should review licensing data: what is collected, how it is analysed and how it is shared.

b) In the longer term: BEIS/Home Office should be ambitious and creative when designing the data collection and analytic functions of the Single Enforcement Body. They should draw on innovative practice such as the Health and Safety Executive’s (HSE) and HMRC’s risking models and consider how best to draw on expertise from outside government.

Lead body: GLAA

Sector / theme: Agriculture

c) Within the Single Enforcement Body: the licensing function should be fully integrated into the data capability of the new organisation. BEIS/HO/GLAA should identify where streams of data around licensed labour providers and labour users can be usefully compared and combined to understand risk and identify non-compliance and target resources appropriately.

Lead body: BEIS, HO and GLAA

Sector / theme: Agriculture

Recommendation 9

The LME bodies should undertake analysis and work in partnership with academics and Joint Slavery and Trafficking Analysis Centre (JSTAC) to fill key evidence gaps in understanding labour market non-compliance and the effectiveness of enforcement. This will be especially important to feed into the SEB development.

Specifically, the DLME, in collaboration with the labour market enforcement bodies and other relevant organisations (including the facilitation of access to case information), will seek to review existing and past cases of severe labour exploitation to improve the understanding of how worker exploitation comes to light. This should consider:

• Who do workers confide in? and
• What opportunities are there to encourage people to report labour abuse?

The findings should feed into the communication and engagement strategies for the enforcement bodies and the future SEB.

Lead body: All bodies with ODLME

Sector / theme: Agriculture

Recommendation 12a

Lead body: BEIS, HO and ODLME

Sector / theme: Construction

Annex D: recommendations from LME strategies 2021 to 2022 – alignment to thematic priorities

2020 to 2021 recommendations: social care

Recommendation 2

The department for business and trade (DBT) we support of HMRC and MW who majesty’s Revenue and Customs and national minimum wage should continue to improve guidance around national minimum wage/national living wage (NMW/NLW) in collaboration with stakeholders by:

a. updating guidance promptly following anything legal or policy developments and proactively disseminating this in a timely manner with a publicity campaign to reach both workers and employers and

Lead body: HMRC NMW and DBT

Delivery date: December 2022

Sector / theme: Engagement and support

Recommendation 3

The LME bodies should work closely with external partners particularly within high-risk sectors to find innovative ways to disseminate information and raise awareness of employment rights and enforcement among employers and workers.

a. The LME bodies should bring together an information pack of employer obligations for Local Authorities to pass on to those receiving direct payments for care needs and

b. The LME bodies should target the dissemination of information resources for workers including via skills providers Skills for Care and / or devolved worker regulation schemes at the point of certification or training.

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Engagement and support

Recommendation 4

The LME bodies should identify ways to support local authorities actively and effectively in their due diligence and monitoring of externally commissioned services with focus on workers’ rights.

Specifically, for social care the LME bodies should consider the following methods but may find other ways of achieving the same aim:

a. develop a good practice guide that local authorities can easily incorporate into their procurement processes and

b. raise awareness when local authorities of the enforcement bodies’ powers, regulations, and common breaches to ensure a greater flow of intelligence and appropriate referrals where non-compliance is suspected

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Joined up thinking

Recommendation 5

I recommend that DBT and Home Office (HO) work closely with the Department of Health and Social Care (DHSC)to ensure social care reform includes consideration of worker rights and enforcement, building on learning from the variability in social care models within the UK.

Lead body: DBT and HO

Delivery date: December 2023

Sector / theme: Joined up thinking

2020 to 2021 recommendations: agriculture

Recommendation 7

GLAA and Home Office should review the licensing system and budget to include increased compliance inspections and routine visits.

Lead body: DBT and HO

Delivery date: December 2023

Sector / theme: Joined up thinking

GLAA and Home Office should evaluate the effectiveness of increased use of unannounced visits as agreed from the 2019 to 2020 strategy.

Lead body: DBT and HO

Delivery date: December 2023

Sector / theme: Improving focus and effectiveness

Recommendation 8

The GLAA should review licensing data: what is collected, how is it analyses and how is it shared.

In the immediate term: the GLAA should strengthen the licence holder database to improve the range and quality of information held, and to identify trends and indicators of risk to inform inspection policy, including the characteristics of licence holders and correlations with risk of non-compliance.

Lead body: GLAA

Delivery date: December 2023

Sector / theme: Improving the radar picture

Recommendation 10

I encourage the GLAA and Home Office to engage with Defra to consider the scope to include protection compliance as part of the relationship between the new farming subsides systems and the protection of labour rights.

Lead body: GLAA and HO

Delivery date: December 2023

Sector / theme: Better joined up thinking

Recommendation 11

GLAA should continue to work closely with Immigration Policy to ensure the Seasonal Workers Pilot builds on the existing approach of incorporating prevention of exploitation within the programme.

Lead body: GLAA

Delivery date: December 2022

Sector / theme: Better joined up thinking

2020 to 2021 recommendations: construction

Recommendation 12

b. In the interim, the enforcement bodies should build on the Construction Protocol and ODLME will support work to develop the evidence base around the sector. Learning from this would then inform the development of the Single Enforcement Body.

Lead body: All bodies with ODLME

Delivery date: December 2022

Sector / theme: Better joined up thinking

Recommendation 13

GLAA should explore how to provide information to property owners when planning permission is granted for construction work on the signs of labour exploitation and how to report concerns.

Lead body: GLAA

Delivery date: December 2023

Sector / theme: Engagement and support

Recommendation 14

Both in construction and in other high-risk sectors, the enforcement bodies should increase their promotion of instances of good practice where a brand/household name has identified and taken successful action against severe labour abuse within the supply chain. This is both to publicise the work within the industry and increase the deterrent effect. Development of the SEB should be mindful of existing barriers that might prevent the current enforcement bodies from doing this.

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Engagement and support

Recommendation 15

Across sectors, where the LME bodies identify severe exploitation, there should be an automatic and systematic review of the extended labour supply chain to:

a. identify vulnerabilities and potential wider exploitation related to the initial case

b. inform and educate the organisations in the supply chain about the weaknesses in their systems

c. identify organisations where there is repeated failure of expected levels of due diligence

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Engagement and support

2020 to 2021 recommendations: hand car washes

Recommendation 16

The Local Authority pilot scheme being developed by Responsible Car Wash Scheme (RCWS (in the New Year 2021) should be used to explore and test the effectiveness of compulsory licensing across the whole HCW sector. The Home Office should support the pilot through funding and independent evaluation, and if the model is found to be successful, it should be rolled out nationally.

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Engagement and support

Recommendation 17

Recognising existing work by HMRC NMW, all enforcement bodies should explore the opportunities to make greater use of innovative technologies such as predictive analytics to complement existing enforcement efforts to identify areas of risk, together building up expertise to feed into the SEB.

Lead body: All bodies

Delivery date: December 2023

Sector / theme: Improving focus and effectiveness

Recommendation 18

As per recommendation 9, the LME bodies should undertake analysis and work in partnership with academics and JSTAC to fill key evidence gaps in understanding labour market non-compliance and the effectiveness of enforcement. This will be especially important to feed into the SEB development.

Specifically, the enforcement bodies and wider law enforcement should seek to better understand why so few referrals result in the identification of modern slavery offences, to help achieve a more efficient use of their resources.

Lead body: HMRC NMW and GLAA

Delivery date: December 2022

Sector / theme: Improving the radar picture

Recommendation 19

GLAA and HMRC NMW should work more closely with NGOs who are active in the HCW sector, such as the Safe Car Wash app and the Modern Slavery Helpline, to improve the quality of the information and intelligence relating to non-compliance in the hand car washes.

Lead body: HMRC NMW and GLAA

Delivery date: December 2022

Sector / theme: Improving the radar picture and better joined-up thinking

2021 to 2022 recommendations: risk modelling

Recommendation 1

I recommend that the enforcement bodies, together with the ODLME information Hub and external experts, continue to develop the risk model, including widening the information sources used and improving the robustness of the data. This evolving model should feed into the development of the Single Enforcement Body’s approach to assessment and prioritisation of risk. The assessment should be reviewed every 6 months.

Lead body: All bodies and ODLME

Delivery date: Ongoing with bi-annual review

Sector / theme: Improving focus and effectiveness

2021 to 2022 recommendations: sector-based approach

Recommendation 2

I recommend that the enforcement bodies should work with ODLME through the Strategic Coordination Group (SCG) to adopt a more strategic, sector-based joint-working approach to tackle non-compliance in high-risk industries. A 2-year programme of work should be developed with appropriate interim milestones, to commence at the beginning 2021 to 2022 financial year. The learning and progress from this programme of work will feed into an effective sectoral approach for the SEB.

Lead body: All bodies and ODLME

Delivery date: December 2023

Sector / theme: Better joined-up thinking

2021 to 2022 recommendations: managing compliance risk from changes in the labour market

Recommendation 3a

To monitor and mitigate the potential risk to workers related to a changing labour market, I recommend that both HMRC NMW and EAS are given the resource and ability to utilise more timely and impactful communication approaches.

Lead body: HMRC NMW and EAS

Delivery date: By the end 2021

Sector / theme: Engagement and support

Recommendation 3b

To monitor and mitigate the potential risk to workers related to a changing labour market, I recommend that all 3 bodies seek to overcome current intelligence and information gaps by maximising the use of the new and alternative data sources (for example from fraud investigations into the Coronavirus Job Retention Scheme) to identify potentially non-compliant employers.

Lead body: All bodies

Delivery date: By 2022

Sector / theme: Improving the radar picture

Recommendation 4

To support the 3 bodies in dealing with shared challenges and rapid change ahead. I recommend that the heads of HMRC NMW, GLAA and EAS convene with coordination from the ODLME, to identify issues of common concern and to find joint solutions wherever possible. This forum could address issues such as resourcing use of innovation, training and operational cultures, and potentially involve time-limited and measurable workstreams.

Lead body: All bodies with ODLME

Delivery date: To commence by the beginning of 2021 to 2022 financial year

Sector / theme: Better joined up thinking and improved focus and effectiveness

2021 to 2022 recommendations: online recruitment

Recommendation 5a

To better understand and develop ways of tackling heightened risks in online recruitment, I recommend that DBT and EAS, working with the recruitment industry and JobsAware (formerly SAFERJobs), explore how they can better use innovative technologies to identify fake and fraudulent jobs advertised online.

Lead body: DBT and EAS

Delivery date: by the end of 2021 to 2022 financial year

Sector / theme: Improving the radar picture

Recommendation 5b

To better understand and develop ways of tackling heightened risks in online recruitment, I recommend that BEIS (i) prioritises the completion of the review of online recruitment accepted from the 2019 to 2020 LME Strategy to evidence better the online harms threat and (ii) feed the findings into broader government and industry discussions around regulating online activity, with a view to identifying practical safeguards and remedies for jobseekers affected by this threat.

Lead body: DBT

Delivery date: Review by the end of 21 to 2022 financial year

Sector / theme: Improving the radar picture

2021 to 2022 recommendations: immigration and labour market enforcement

Recommendation 6a

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, I recommend that a strategic oversite group be established involving relevant government departments and enforcement implications arising from the new immigration system. To be implemented by the end of June 2021, before the deadline for applications for the EU Settlement Scheme.

Lead body: HO

Delivery date: By the end of June 2021

Sector / theme: Improving the radar picture

Recommendation 6b

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, I recommend that the Home Office and DBT commit to regular and ongoing monitoring of the impact of the new immigration system on labour market compliance, building on existing structures such as the Vulnerability Advisory Group. In addition, there should be an independent evaluation of these impacts after 18 months of the new system.

Lead body: HO and DBT

Delivery date: Monitored monthly. Reported by the end of 2022

Sector / theme: Improving the radar picture

Recommendation 6c

To increase the focus and build the evidence base around the impact of the new immigration system on labour market enforcement, I recommend that the Home Office and BEIS, working with the enforcement bodies, should review the interaction between labour market and immigration enforcement to ensure sufficient protections for migrant workers and improve intelligence flows via safe reporting structures. This should feed into development of the SEB.

Lead body: HO, DBT and enforcement bodies

Delivery date: By the end 2021 to 2022 financial year

Sector / theme: Improving the radar picture

Recommendation 7a

The labour market enforcement bodies should urgently act to mitigate the labour exploitation risks of the new immigration system. For all 3 bodies, I recommend that they identify sectors and locations with high numbers of European Economic Area (EEA) migrant workers and issue communications targeting both workers and employers to raise awareness about the immigration changes.

Lead body: All bodies

Delivery date: By mid-2021

Sector / theme: Better joined up thinking

Recommendation 7b

The labour market enforcement bodies should urgently act to mitigate the labour exploitation risks of the new immigration system. For all 3 bodies, I recommend that they better monitor emerging risks from the immigration rules to be able to respond in a timely manner, by increasing their working with:

(i) other enforcement bodies and

(ii) third-party organisations (such as unions, NGOs)

Lead body: All bodies

Delivery date: Start from 2021 to 2022 financial year

Sector / theme: Better joined up thinking

Annex E – acronyms and abbreviations

Acas: Advisory, Conciliation and Arbitration Service

BEIS: Department for Business, Energy and Industrial Strategy

DBS: Disclosure and Barring Service

DBT: Department for Business and Trade

DBT NMW: Department for Business, Energy and Industrial Strategy, National Minimum Wage

CV: Curriculum Vitae

CQC: Care Quality Commission

DCMS: Department for Digital, Culture, Media and Sport

DEFRA: Department for Environment, Food and Rural Affairs

DHSC: Department for Health and Social Care

DLME: Director of Labour Market Enforcement

EAS: Employment Agency Standards Inspectorate

EEA: European Economic Area

EU: European Union

EUSS: EU Settlement Scheme

FCDO: Foreign, Commonwealth and Development Office

FLEX: Focus on Labour Exploitation

GLAA: Gangmasters and Labour Abuse Authority

GLASS: Gangmaster Licensing Application Submission System

HCA: Home Care Association

HCW: hand car wash

HMRC NMW: HM Revenue and Customs National Minimum Wage

HO: Home Office

HOIE: Home Office Immigration and Enforcement

JSTAC: Joint Slavery and Trafficking Analysis Centre

LA: local authority

LGA: Local Government Association

LME: Labour Market Enforcement

LPC: Low Pay Commission

NCA: National Crime Agency

NGO’s: non-government organisations

NLW: National Living Wage

NMW: National Minimum Wage

NRM: National Referral Mechanism

NTU: Nottingham Trent University

ODLME: Office of the Director of Labour Market Enforcement

Ofcom: The Office of Communications, UK independent communications regulator

Operation Tacit: Investigation by enforcement bodies into garment industry in Leicester in 2020 to 2022

Operation Topaz: Investigation by enforcement bodies into adult social care in 2022 to 2024

RCWS: Responsible Car Wash Scheme

SCG: Strategic Coordination Group within ODLME

SEB: Single Enforcement Body

SIC: Standard Industry Classification code

STRO: Slavery, Trafficking and Risk Order

TCN: Tax Classification Number

UCL: University College London

UK: United Kingdom

Annex F – references

UK Visas and Immigration. Employers: illegal working penalties

ONS. Employment by country of birth and nationality

GLAA and Skills and Education Group have been honoured for their work in combatting labour exploitation available at Workers’ rights qualification wins industry award October 2022

GLAA protocols make way for business owned prevention activity 2024

GLAA signs landmark agreements with Kyrgyzstan and Uzbekistan May 2023

GLAA Strategy for 2023-2026

Immigration Act: part 8 - fees and charges updated February 2017

Immigration Act 2016, UK Public General Acts schedule 3 2016

BBC News. Immigration figures: Drop in people coming to UK to work in NHS and social care August 2024

Independent review into labour shortages in the food supply chain: government response Department for Environment, Food and Rural Affairs May 2024

Jobs Aware protecting worker Rights 2024