The government is to investigate thousands of children’s nurseries to find out if staff are being paid at least the minimum wage.
HM Revenue and Customs said visits to 400 sites by its enforcement teams since 2003 had shown many employees were not receiving the minimum wage – currently £5.05 for people aged over 22.
The government said the problem was worse in the childcare sector than in many other areas of employment.
The department said it would take action against rogue employers, but it was expected many others had made genuine mistakes.
But the Professional Association of Nursery Nurses warned the cost of paying extra salaries might potentially be passed on directly to parents.