A UK government-commissioned review of modern working practices has recommended a shakeup of remuneration and employment rights in traditionally low-paid sectors, including retail.

The far-reaching recommendations will bring about major changes in employment that will affect every convenience store in Britain if ministers follow through.

It highlights the need to ensure people, especially those on lower incomes, “have routes to progress in work, have the opportunity to boost their earning power, and are treated with respect and decency at work”.

One of the key recommendations Good Work – The Taylor Review of Modern Working Practices makes is for the focus of the Low Pay Commission (LPC), which advises the government about wage minima, to be expanded.

The LPC should be working with different sectors to improve the quality of low-paid work and it should undertake sectoral reviews where a significant proportion of the workforce are on, or close to, the minimum wages “such as retail, social care and hospitality”, it says.

Matthew Taylor, former adviser to Tony Blair, recommends LPC collaboration with expert bodies that would “support the delivery of a future labour market built on fair and decent work”.

The LPC should advise on the impact of bringing in a “higher” National Minimum Wage (NMW) for hours not guaranteed in a contract. This new higher rate should be set at a level which incentivises employers to schedule guaranteed hours as far as reasonable within their business, the review says.

Taylor believes the National Living Wage is a powerful tool to raise “the financial base line” of low paid workers. It needs to be accompanied by sectoral strategies engaging employers, employees and other interested parties to ensure that people – particularly in low paid sectors – are not stuck at the living wage minimum or facing insecurity but can progress in their current and future work, he says.

The report includes recommendations for people working for platform-based companies, such as Deliveroo, to be reclassified as “dependent contractors”, developing strategies to ensure that people are not “stuck” on the National Living Wage rate, and avoiding increases in the associated costs of employing people such as the Apprenticeship Levy.

The government should reform Statutory Sick Pay so that it is explicitly a basic employment right, comparable to the National Minimum Wage, for which all workers are eligible regardless of income from day one.

It should be payable by the employer and should be accrued on length of service, in a similar way to paid holiday currently. The government should ensure that there is good awareness of the right amongst workers and businesses, the review says.

Taylor says the law and its applications should help businesses make the right choices and help individuals “to know and exercise their rights” but acknowledges the high, “largely non-wage, costs associated with taking someone on as an employee is already high and we should avoid increasing it further”.

Association of Convenience Stores chief executive James Lowman said: “The conclusion of the Taylor Review moves us towards greater clarity on the status of people in different work circumstances.

“We welcome the review’s focus on ensuring that employers and other stakeholders are engaged in a programme to look at increasing productivity, developing skills and defining the role of technology, and we look forward to working with government on behalf of the convenience sector.”

Lowman was concerned, however, about the introduction of a separate rate of the NMW for non-guaranteed hours, as this could lead to less flexibility for both employers and staff, as well as higher costs at a time when retailers were already having to cut back staff hours in their business.