WORKERS in Scotland are routinely being exploited by employers who are refusing to pay the minimum wage.

According to research by Citizens Advice Scotland (CAS), the problem is particularly prevalent among young employees, while hotels, restaurants and cafes are the worst offenders.

Hairdressing and construction were also highlighted as industries in which firms are often guilty of failing to pay the minimum legal rate.

Just more than half (53%) of Citizen Advice Scotland’s advisers said non-payment of the national minimum pay rates is a “very” or “fairly” significant problem in their area.

Susan McPhee, head of policy at CAS, said: “The minimum wage has been law for more than 10 years, but a significant number of employers are refusing to pay it, and as a result workers are exploited on illegal wages.

“All political parties accept the principle of a minimum wage, but it seems some employers believe the law is optional. Our experience shows many workers are unaware of their rights or lack confidence in how to fight for them.”

The National Minimum Wage was made UK law in April 1999 and is currently £6.08 an hour for those aged over 21. It lowers to £4.98 for those between the ages of 18 and 21. For 16 and 17-year-olds, the threshold is £3.68.

HM Revenue and Customs (HMRC) has the powers to issue a notice of underpayment if an employer is found to be flouting the legal threshold, and employers face a fine to HMRC of 50% of the total underpayment that has occurred since April 2009. The minimum penalty is £100 and the maximum £5000.

Parliamentary records show 1128 notices of underpayments were made to employers between April 1, 2010, and March 31, 2011, with arrears in wages paid to workers in 45% of cases.

CAS said recent cases included that of a 21-year-old man who started as an apprentice mechanic four years ago and who still receives £4 an hour despite now being fully qualified.

In another case, a young woman who worked at a hair salon refused to sign a form that would tie her to an hourly wage of £2.26. The worker used to be an apprentice but is entitled to the minimum wage after qualifying. The worker was told not to come back to work and is still owed wages, CAB said.

In a report last year, the Joseph Rowntree Foundation (JRF) found 380,000 Scots were earning less than £7 an hour. Some 58% of retail and wholesale workers were employed below that level.

In Scotland, First Minister Alex Salmond has spoken in favour of a “living wage” of £7.15 per hour for Holyrood employees, with staff Glasgow City Council paid at least £7 an hour.

The Glasgow figure was set after research by the JRF which developed a formula for calculating a minimum income standard. Firms in the city are encouraged to pay their staff at least this amount.

A Scottish Government spokesman said: “Low pay is an issue the Scottish Government takes very seriously. This is why our Public Sector Pay Policy makes sure pay is fair and non-discriminatory, and commits to paying a living wage above the national minimum wage. We believe a fairer distribution of wealth is key to tackling poverty.”

A spokeswoman for HM Revenue & Customs said: “HMRC investigates every complaint about non-payment of the nat-ional minimum wage and takes firm action when called for.

“Over £42 million in wage arrears has been identified since April 1999, and while the majority of employers comply with the law those that don’t face penalties, enforcement orders covering arrears, and in the most serious cases prosecution and a criminal record.”