Large numbers of employers are it seems now in the habit of shortchanging their staff as a deliberate strategy to increase profits. At least 2 million workers a year in the UK are being cheated of pay they are owed. This estimate of the scale of wages theft comes from a new report from researchers at Middlesex University, which puts the value of the lost pay at over £3bn a year.

Many employers have been able to adopt this business model with impunity. Assuming they have been able to find the fees for employment justice workers may take cases to tribunal and win, but only about half of those will actually receive the full amount they have been awarded. They have to pay the cost of bailiffs themselves if employers refuse to pay up; they often get nothing at all.

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Two million people betrayed every year, their rights undefended – this is where you end up when you pursue a double-edged policy of steadily deregulating capital while legislating repeatedly to hamstring unions. We have made it easier for bosses to ignore the law, and ever harder for organised labour to take collective action against them. (The supreme court recently ruled employment tribunal fees unlawful but we have yet to hear how government will respond.) The victims tend to be the young and the vulnerable. And we wonder why these groups feel angry and disenfranchised.

The researchers from the Unpaid Britain project have given academic underpinning to what many young people and their families already know. In some sectors it has become normal to be cheated at work; and when it happens, you are largely powerless.

The sectors that lead Unpaid Britain’s “delinquency index” happen to be the few where you can actually get work when you are trying to get yourself through university, or when you are starting out in the job market, or making a beginning as a migrant: food service, entertainment and sports venues, personal services such as nail bars, dry cleaners and hairdressers, and security services and agency working. The majority of students I know confirmed that this has been their experience. The British ones discussed being cheated of pay with resignation, as though absence of protection from over-powerful employers was to be expected from a state that also saddled them with huge debt for education and charged them usurious rates of interest on it. The migrants I spoke to knew they were at the bottom of the pile in the current hostile climate.

A handful of anecdotes from dozens of people I have interviewed reveal the methods employers favour, and these are corroborated in the report as commonly used across the workforce. Most of the young people were doing restaurant, bar or retail work, on casual or verbal contracts, with constantly changing shifts. They would sign up at the beginning of a week to a manager’s call-out for workers for particular hours, but the hours might change several times, before and during shifts. They would be asked to stay longer when it was busy but sent home when it was quiet.

Payslips, when they were given any, came at a different time to payments, and for many did not make clear to which hours and days wages related, making it almost impossible to track whether they had been paid the right amount. Those who kept careful records found they were regularly underpaid an hour or three a week but struggled to prove it, since the only record was the manager’s original call-out sheet.

A few hours’ pay docked each week from several workers represents tens of thousands of extra profit each year

A few hours’ pay docked each week from several workers represents tens of thousands of extra profit each year for an employer. One in 12 workers is not given a payslip as required by law. Others had arbitrary, unlawful deductions taken from their wages – for example, if a customer left without paying the bill or a payment later failed to be processed, staff had it taken from their pay packet.

These were not corner takeaway restaurants but well-known names, and in some cases high-street chains. Bad practice that took hold in agencies supplying migrant workers two decades ago has now spread to the mainstream to such an extent that casual workers expect employers to behave unlawfully. Only one of the people I spoke to was given holiday pay, even though as casual workers with highly variable hours they all had a statutory right to an extra 12% of wages earned for holiday from day one. Their employers seemed to have a policy of not mentioning, nor paying, it until challenged. Unpaid Britain’s examination of official data suggests that at least £1.8bn of holiday pay owed goes missing each year.

One of the biggest breaches in recent years involved the UK’s largest privately owned security firm, Total Security Services. Named and shamed by the Department for Business, Innovation and Skills, it had failed to pay £1.74m to more than 2,500 workers. It declined to respond when I asked it why. Unpaid Britain points out that enforcement and paying up was painfully slow.

It is often the most vulnerable who become victims. Jacqueline Gunning was happily employed as a sales assistant in a dry cleaners in north London for over 15 years, until a new owner and his business partner took over from the original family firm. Gunning has learning disabilities but had enjoyed the sociability the work brought as well as earning her own money. The new management changed her hours and she found herself working 58 hours a week for £150 while being shouted and sworn at. The workload left her barely able to cope, and she became suicidal. Eventually she left.

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Citizens Advice was able to take her case to tribunal thanks to special charitable funding for legal work to support vulnerable people. In April this year she was awarded £106,000, including over £30,000 in unpaid wages. But within a month of the ruling, the owner declared himself bankrupt. Citizens Advice is still fighting her case, looking for any hidden assets he may have – he told me he had none. She may end up with only a small fraction of her dues from the government’s insolvency service.

Given the sustained assault on union activity and the difficulty of organising labour in businesses characterised by extreme casualisation, it is perhaps not surprising that few workers are aware of their rights.Fewer still know how to navigate the fragmented system of getting redress when they are infringed. More than 13 different bodies currently have a role in government enforcement of employment rights.

Outrage about employment practices has tended to focus on zero-hours contracts and false self-employment. But the spread of wages theft represents just as much of a threat to low-paid workers. The government appointed a director of labour market enforcement for the first time this year and has also heard from an independent review of modern working practices. Now it needs to act, because we are in dangerous territory when significant sections of the working population feel the rule of law no longer appears to protect them.

• Felicity Lawrence is a special correspondent for the Guardian