Run my own business....never ceases to amaze me how many staff moan that they have no money, yet refuse to work more hours.
It's not worth it if they're on a low enough income to qualify for benefits. Especially if they're already earning at or close to the personal allowance for tax.
If they earn £10 extra, that will be £6.80 after deducting tax and NI. Out of that £6.80, housing benefit or universal credit will claw back 63%, so roughly £4.40. They'll only be about £2.50 better off, even if they don't have any extra childcare costs.
I wouldn't work an extra hour for £2.50, and that's without factoring in the fuck-up factor of losing UC the month after they've spent the extra income, or housing benefit taking weeks to adjust the amount down and then weeks to put it back up again, leaving them short of money and unable to pay their rent.
Even without being on benefits, people can end up being worse off doing more hours. When my colleague came back from maternity leave, she was no worse off doing 3 days a week than doing 5, because she didn't have to make student loan repayments and saved 2 days childcare. By the time she factored in another 2 days-worth of petrol, she'd have been working those days for nothing.