UNION leaders warn that sweatshops in East Lancashire are thriving despite the introduction of the minimum wage.

Although a year since the £3.60 lower limit was introduced, unions believe many employers in the area -- particularly in the textile industry -- are paying less.

"The minimum wage certainly hasn't eliminated the sweatshops in this area," said Maxine Nixon, a senior officer for the General Municipal and Boilermakers (GMB).

"We are still getting phone calls from workers paid substantially less than the minimum wage."

But she said speculation that the introduction of the minimum wage pushed more employers into the black economy, making the situation worse, was not borne out by her experience.

"There is no evidence that the situation has been made worse but it is still very much a problem.

"Part of the difficulty is that a lot of these employees are on illegal contracts and need the money even though it is less than they should be paid."

And the GMB urges reputable employers to do more to make sure the problem is tackled.

"If every employer sub-contracting work checked to see that workers were paid properly, that would help considerably."