Government Names Employers Not Paying Minimum wage
Government Names Employers Not Paying Minimum wage
The government has named 360 businesses which have failed to pay either the national minimum wage or the national living wage.
It’s the largest-ever such list of minimum and living wage offenders, who underpaid 15,520 workers by a total of £995,233. For the first time the list includes firms which failed to pay the national living wage, which was introduced on April 1st 2016 for workers over the age of 25.
The current rate is £7.20 an hour. Those under 25 receive the national minimum wage, currently £6.95 for 21 to 24 year-olds, and £5.55 for 18 to 20 year-olds.
The Government introduced its ‘naming and shaming’ scheme in 2013 and so far more than 1,000 employers have been named for underpaying staff more than £4.5m in total. There are a further 1,500 cases which HM Revenue and Customs is investigating.
The strategy has been a key part of the business department’s attempt to enforce the minimum wage since 2013, though critics say the policy exposes unintentional errors more often than deliberate exploitation.
Excuses used by businesses for not paying the full basic wage included using tips to top up pay, making reductions to pay for a Christmas party, or making staff pay for their own uniforms.
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Debenhams tops government’s shame list for underpaying staff
Debenhams topped the list of 360 employers the government has caught underpaying workers. The high street retailer was paying less than the legal minimum wage to almost 12,000 of its staff.
Debenhams said the underpayment was due to a technical error in its payroll calculations, which was identified last year during a routine audit by HM Revenue & Customs. The employees, who were owed an average £11 each, have been reimbursed.
“We have apologised to all our colleagues affected and have taken steps to ensure it cannot happen again,” said a Debenhams spokesperson.
Sandwich chain Subway, Lloyds Pharmacy and clothing retailer Peacocks are other high-profile names among 360 employers identified by the government.
The government’s list indicates that hospitality businesses, including restaurants and hotels, were most likely to fail to meet their salary obligations, with 84 employers in the sector underpaying a total of 563 workers.
Naming and shaming of employers is not enough, say unions
The TUC has said naming and shaming on its own is not a big enough deterrent and has urged higher fines and more prosecutions.
“This should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed,” said the TUC’s general secretary, Frances O’Grady.
“But we also need to see prosecutions and higher fines for the most serious offenders, especially those who deliberately flout the law,” she said.
The union Unite said the Government should take “much stronger action” to punish underpayers, and described its name and shame approach as a “light tap on the knuckles”.
Steve Turner, Unite assistant general secretary, said: “The fact that the Government has mounted only 13 prosecutions for non-compliance since 2007 is pathetic. In America, bad bosses are jailed and heavily fined for ‘wage theft’ which is what this is, exploiting workers in such a shameful fashion.”
Government vows wage abuses won’t go unpunished
Business Minister Margot James said: “Every worker in the UK is entitled to at least the national minimum or living wage and this Government will ensure they get it. That is why we have named and shamed more than 350 employers who failed to pay the legal minimum, sending the clear message to employers that minimum wage abuses will not go unpunished.”
Conor D’Arcy, policy analyst at the Resolution Foundation think-tank, said that while naming and shaming was “an important tool in the government’s armoury,” the government’s new labour market enforcement unit should play a key role in monitoring the efficacy of the existing approach. The government has appointed Sir David Metcalf as the first “director of labour market enforcement.” with the task of identifying unscrupulous employers.
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