Posted on Aug 18, 2017
The latest Government ‘name and shame list’ has seen 233 employers being publicly identified as failing to pay the national minimum wage.
More than 13,000 of the UK’s lowest paid workers will get around £2 million in back pay as part of the government’s scheme to name employers who have failed to pay National Minimum Wage and Living Wage.
As well as paying back staff the money owed, employers on the list have been fined a record £1.9 million by the government. Retail, hairdressing and hospitality businesses were among the most prolific offenders, with well-known retailer Argos topping the list.
Since 2013, the scheme has identified £6 million back pay for 40,000 workers, with 1,200 employers fined £4 million.
Business Minister Margot James said:
“It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers. Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.”
Bad employers or just managers making mistakes?
See the full list of employers here. Many of the employers listed had made errors in calculating pay rather than deliberately choosing to pay lower rates.
Argos received a fine of £800,000 after it admitted a mistake earlier this year that meant it underpaid 37,000 staff an average of £64 each. The company was caught out as employees had been required to attend briefings before their shifts started, for which they were not paid, as well as security searches at the end of their shifts.
John Rogers, chief executive of Argos, which is now owned by Sainsbury’s, said in a statement:
“I am pleased to say the issue was resolved quickly, and processes have been updated to ensure this cannot happen again.”
Other common errors made by employers in this round included deducting money from pay packets to pay for uniforms, failure to account for overtime hours, and wrongly paying apprentice rates to workers.
ELAS employment law consultant Emma O’Leary explains no matter what the reason, businesses need to address the issue and get staff wages right, taking advice if necessary:
“Each time the government publishes its name and shame list we are told that it is the largest list published, which tells us that companies still don’t understand the importance of ensuring their obligation to pay a minimum wage is met. Whether this is a deliberate attempt to save money thinking they won’t get caught or an innocent error, this is certainly something that needs to be addressed. The government has been very clear in their message when it comes to National Minimum Wage – no one is exempt from paying it and no one will escape.
“As well as having to repay their employees, employers on the list have also been fined a record £1.9 million by the government. Now that tribunal fees have been abolished, employees who are owed a seemingly small amount of wages have nothing to lose by starting employment tribunal proceedings. We anticipate a sharp rise in the number of wages claims.”
TUC General Secretary Frances O’Grady said:
“This should be a wake-up call for employers. If you cheat staff out of the minimum wage, your reputation will be dragged through the mud. The minimum wage has been around for nearly twenty years. There is no excuse for employers to claim ignorance, or to blame problems on admin errors.
“Increasing investment in enforcement is clearly paying off. This is a huge amount of cash owed to low-paid workers. We know there are more wage-dodging employers out there. TUC research suggests there are at least a quarter of a million workers being cheated out of the minimum wage.”
What do employers need to know?
The current National Minimum Wage is:
- National Living Wage (25 years and over) – £7.50 per hour
- 21-24 year olds – £7.05 per hour
- 18-20 year olds – £5.60 per hour
- 16-17 year olds – £4.05 per hour
- Apprentice rate – £3.50 per hour **as above
Melissa Tatton, Director at HM Revenue and Customs said:
“HMRC is committed to getting money back into the pockets of underpaid workers, and continues to crack down on employers who ignore the law. Those not paying workers the National Minimum or Living Wage can expect to face the consequences.”