Low Pay: April 2013

Survey Details

The ASHE is based on a sample of employee jobs taken from HM Revenue & Customs (HMRC) Pay As You Earn (PAYE) records. Information on earnings and hours is obtained from employers and treated confidentially. ASHE does not cover the self-employed nor does it cover employees not paid during the reference period. In 2013 information related to the pay period which included 17 April.

This release contains summary earnings statistics from the 2013 Annual Survey of Hours and Earnings (ASHE). More detailed information is available on the National Statistics web site.

Basic Quality Information

Link to Summary Quality Report

A Summary Quality Report for the ASHE can be found on the ONS website. This report describes in detail the intended uses of the statistics presented in this publication, their general quality, and the methods used to produce them.

Common pitfalls in interpreting the series

Although the low pay estimates attempt to measure the number of jobs that are paid below the national minimum wage, it should be noted that the estimates cannot be used as a measure of non-compliance with the legislation. This is because it is not possible to determine from the survey data whether an individual is eligible for the minimum wage. For example, it is not possible to identify people such as apprentices and those undergoing training who are exempt from the minimum wage rate or are entitled to lower rates. In addition, if employees receive free accommodation, employers are entitled to offset hourly rates.

Relevance

The low pay estimates presented relate to gross pay excluding overtime before tax, National Insurance or other deductions, and exclude payments in kind. The results are limited to earnings relating to the survey pay period and so exclude payments of arrears from another period made during the survey period. Any payments due as a result of a pay settlement but not yet paid at the time of the survey are also excluded.

Published low pay estimates do not include those employees whose earnings in the pay period were affected because of absence from work.

Full-time employees are defined as those who work more than 30 paid hours per week or those in teaching professions working 25 paid hours or more per week.

This bulletin only gives estimates of the total number of jobs paid below the national minimum wage by sex or age band. More detailed estimates, including the UK distribution by 10p bands and analyses by occupation, industry and regions, are given for years 1998 to 2013 in the reference tables included in the Low Pay - April 2013 release.

UK legislation covering minimum wage rates for employees over the age of 18 was introduced on 1 April 1999. In October 2004 a national minimum rate was introduced for 16 to 17-year-olds. Since their introduction the national minimum wage rates have been regularly reviewed. In October 2010 the age at which employees are entitled to the main national mimimum wage rates was changed from 22 years old to 21 years old. Details of the different wage rate levels are given in the following table.

Accuracy

Revisions

In line with normal practice this release contains revised estimates for the number of jobs paid below the national minimum wage from the 2012 survey results, which were first published on 22 November 2012. These estimates take account of some corrections to the original 2012 ASHE data that were identified during the validation of the results for 2013, as well as late returns.

Low pay estimates for 2012 have been revised down by 7 thousand jobs.

Both the 2013 Low Pay estimates and the revised 2012 Low Pay estimates will be made available from 12 December 2013.

Sampling error

Sampling error results from differences between a target population and a sample of that population. Sampling error varies partly according to the sample size for any particular breakdown or 'domain'. Indications of the quality of ASHE estimates are provided in the form of coefficients of variation (cv). The coefficient of variation is the ratio of the standard error (se) of an estimate to the estimate, expressed as a percentage. Generally, if all other factors are constant, the smaller the cv the higher the quality of the estimate. The coefficients of variation for estimates of UK jobs paid below national minimum wage in April 2013 are shown in the table below:

Response

The 2013 ASHE is based on approximately 184 thousand returns.

ASHE - LFS central estimates 1998 - 2003

For 1998–2003, the average of the ASHE and the Labour Force Survey (LFS) estimates (the ‘central estimate’) has been taken as the best available indication of the number of jobs paid below the national minimum wage. This is because the ASHE cannot stand alone as the source for low pay estimates without the additional samples introduced in 2004 to improve its coverage. For comparison, the estimate for low pay jobs in 2004 is 276 thousand with the additional samples, and 270 thousand with the central estimate.

Coherence

The LFS collects information on the earnings, and normal and actual hours worked, of about 15 thousand people aged 16 and over each quarter. In addition it collects data on a wide range of personal characteristics, including education level and ethnic origin. This enables the preparation of statistics on levels and distribution of earnings similar to the ASHE but with lower precision due to the much smaller sample size.

Notes on tables

The percentage changes of constituent items in tables may not always agree exactly with the values shown due to rounding.

Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gov.uk

The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

Designation can be broadly interpreted to mean that the statistics:

• meet identified user needs

• are well explained and readily accessible

• are produced according to sound methods

• are managed impartially and objectively in the public interest

Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.