- 9th August 2021
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Employers ‘named and shamed’ for paying less than minimum wage
The government has named and shamed 191 employers who have underpaid workers, including major household names, as companies failed to pay £2.1m to over 34,000 workers due the national minimum wage
This followed investigations by HMRC into breaches which took place between 2011 and 2018. Named employers have since been made to pay back what they owed, and were fined an additional £3.2m.
The government recently gave millions a pay rise, by increasing national living wage and national minimum wage rates in April 2021. The rise means someone working full time on the national living wage will be taking home £5,400 more annually than they were in 2010. Every UK worker is entitled to the national minimum wage, regardless of their age or profession.
Minimum wage breaches can occur when workers are being paid on or just above the minimum wage rate, and then have deductions from their pay for uniform or accommodation.
Topping the list was department store John Lewis plc, which failed to pay £941,355.67 to 19,392 workers, while convenience store group, Martin McColl Retail Limited, failed to pay £258,047.8 to 4,366 workers. Another retail outlet, One Stop Stores Limited, also failed to pay £56,505.04 to 2,631 workers, while the Body Shop also fell short, underpaying £34,670.81 to 959 workers.
A John Lewis spokesperson said: ‘This was a technical breach that happened four years ago, has been fixed and which we ourselves made public at the time.
‘The issue arose because the Partnership smooths pay so that partners with variable pay get the same amount each month, helping them to budget.
‘Our average minimum hourly pay has never been below the national minimum wage and is currently 15% above it.’
The employers named underpaid workers in the following ways:
- 47% wrongly deducted pay from workers’ wages, including for uniform and expenses;
- 30% failed to pay workers for all the time they had worked, such as when they worked overtime; and
- 19% paid the wrong apprenticeship rate.
Business minister Paul Scully said: ‘Our minimum wage laws are there to ensure a fair day’s work gets a fair day’s pay – it is unacceptable for any company to come up short.
‘All employers, including those on this list, need to pay workers properly.
‘This government will continue to protect workers’ rights vigilantly, and employers that short-change workers won’t get off lightly.’
Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates. They also face hefty financial penalties of up to 200% of arrears – capped at £20,000 per worker – which are paid to the government. Since 2015 the government has ordered employers to repay over £100m to 1m workers.
A significant number of the minimum wage breaches identified affected those on apprenticeships. The government has published new guidance to ensure employers know exactly what they need to do to pay their apprentices, and all workers, correctly.
Chair of the Low Pay Commission Bryan Sanderson said: ‘These are very difficult times for all workers, particularly those on low pay who are often undertaking critical tasks in a variety of key sectors including care. The minimum wage provides a crucial level of support and compliance is essential for the benefit of both the recipients and our society as a whole.’