Household names come under fire over minimum wage non-compliance

20 February 2017

More than 350 employers have been named and shamed for underpaying their workers the national minimum or living wage and over 15,500 of the UK’s lowest paid workers have received back pay due to government investigations.

The Department for Business, Energy and Industrial Strategy named 359 businesses who underpaid 15,513 workers a total of £994,685, with employers in the hairdressing, hospitality and retail sectors the most prolific offenders.

According to the report Debenhams Retail plc, London NW1, failed to pay £134,894.83 to 11,858 workers.

As well as recovering arrears for some of the UK’s lowest paid workers, HMRC issued penalties worth around £800,000.

For the first time, the naming list includes employers who failed to pay eligible workers at least the new National Living Wage rate, which is currently £7.20 for workers aged 25 and over (increases to £7.50 from 1 April 2017).

Excuses for underpaying workers included using tips to top up pay, docking workers’ wages to pay for their Christmas party and making staff pay for their own uniforms out of their salary.

Sectors which feature prominently in this naming and shaming round are:

  • hospitality: 84 employers, £240,516.64 arrears for 563 workers
  • retail: 51 employers, £220,103.78 arrears for 167 workers
  • hairdressing: 39 employers, £65,964.20 arrears for 85 workers
  • social care: 24 employers, £43,636.90 for 145 workers.

Argos has also come under fire. According to a report from The Times, thousands of Argos workers will share £2.4m after it emerged they were paid below the National Living Wage. Around 37,000 current and former Argos staff are to receive an average of £64 each. Sainsbury’s, which took over Argos last year, said the problem related to the timings of staff briefings before they had clocked on to their shifts, and security searches which could happen after workers finished a shift. HMRC fined the retailer £1.5m for the oversight.

 

Any complaints that are raised with Acas will be referred to HMRC who will investigate. More than 1,500 cases are currently being worked on by HMRC and eligible employers will be named and shamed after their cases have been closed.

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