TRADE unions demanded more powers to report minimum wage underpayment today after a new report said offending bosses should be punished harshly.

According to the report, published by the Resolution Foundation, the rate of underpayment for workers earning the legal minimum and aged over 25 has risen from one in five in 2016 to one in four last year.

However, there is only a one in eight chance of firms that break the law being caught.

Breaches by smaller employers are even less likely to be detected, the study finds, since the responsibility for reporting underpayment lies with the affected workers.

Resolution Foundation analyst Lindsay Judge said that the introduction of the so-called national living wage in 2016 had led to this “worrying” rise in underpayment, with many bosses failing to increase wages in line with the law.

“As the government plans to increase the legal wage floor through this parliament, it is essential to strengthen the incentives for firms to comply,” she said.

The GMB has called for unions to be given greater power to intervene in alleged underpayment cases and for the government to legally enshrine the right of workers to seek trade union help in cases of possible underpayment.

GMB London regional secretary Warren Kenny said: “The level of underpayment of the national minimum wage is likely to be higher than the figures from HMRC shows.

“This is because the onus of reporting cases of underpayment currently falls on low-paid workers themselves.

“Many fear reprisals if they act and so they keep their heads down.

“GMB has called for workers to be able to ask their trade unions to be able to take up cases on their behalf with HMRC. This is not allowed now.

“As the national minimum wage increases as a proportion of average wages, it is essential that other enforcement avenues are opened up for vulnerable workers.

“This is something the new government could do to help workers across the land at no cost to taxpayers.”

A government spokesman said: “HMRC won't hesitate to take action to ensure that workers receive what they are legally entitled to.”