"Every worker has the right to the minimum wage, yet illegal non-payment is all too common in the social care sector. It's scandalous that these workers, who do such demanding and valuable work, are being cheated out of 130 million pounds [$198 million] every year through what is effectively wage theft by their employers," Resolution Foundation analyst Laura Gardiner said in a statement.
The underpayments of about 160,000 of 1.4 million social care workers are largely due to the failure of employers to compensate time spent traveling between clients and time spent waiting for a call. Care providers are trying to cut their wage bill as the government reduces public care budgets, the report said.
The average sum lost by each care worker amounts to 815 pounds ($1,200) a year, the study revealed. Care workers also lose 4 million pounds in pension payments per year.
The study suggests that the government, local authorities and employers should take joint effort to end up the practice of illegal non-payment.
"Employers must commit to better treatment of their staff, local government must take greater responsibility for the behavior of care providers, while national government must recognize the impact of reduced social care budgets on the funding available to local authorities for care contracts," the report concluded.
Minimum wage in the United Kingdom stood at 6.5 pounds per hour in 2014.
The Resolution Foundation is an independent think tank founded in 2005. The organization provides research and policy solutions to improve the living standards of low-wage earners.