The Low Pay Commission says the "taboo" around reporting abuses is a major barrier to enforcing the legal minimum pay.
The report details how "employers have instilled fear in their workers" with intimidation and harassment in the workplace. One worker explained that, if enforcement bodies came to the factory, their boss would act on any suspicions of who made a complaint and fire the person immediately.
Workers were told their P45 could be withheld or "marked" in such a way that they would never work again if it was thought they were causing trouble.
Supply chain auditors with experience of collecting worker testimony said "the fear of retribution is … very real among these workers, to the point where they will sit and shake in meetings or hold your hand as they're talking to you"
One worker had experienced factory owners and managers coaching workers on how to respond to questions from enforcement bodies.
Low Pay Commission chair Bryan Sanderson said:
"Despite some positive recent progress, job insecurity, a poisonous workplace culture and low expectations leave workers trapped in poor-quality jobs and vulnerable to exploitation. These same factors mean they are unlikely to report abuses, which undermines efforts to enforce workers' rights. The problem demands comprehensive action, including to give these workers greater security over their hours and incomes."