finance

Over 200 UK companies named and shamed for failing to pay minimum wage


More than 200 companies have been named and shamed by ministers for failing to pay staff the minimum wage, including groups such as outsourcer Mitie, transport firm Go-Ahead and food producer Greencore.

The Department for Business on Wednesday said the groups had been ordered to repay workers and faced penalties of nearly £2m after breaches left about 12,000 staff paid less than the minimum wage.

In total, 208 businesses were named by the government as having failed to pay workers about £1.2m in “a clear breach of national minimum wage law”.

Businesses found in breach of the wage law face financial penalties of up to 200 per cent of what was owed, which is paid to the government. HM Revenue & Customs’ investigations took place between 2014 and 2019. Since 2015, the government has ordered employers to repay more than £100m to 1m workers.

The companies found to have underpaid staff included Greencore, which failed to pay £12,022 to 602 workers; retailer House of Fraser, which under a previous ownership failed to pay £16,235 to 354 workers; and London General Transport Services, trading as Go-Ahead London, which failed to pay £16,316.91 to 101 workers.

HMRC found recruiter Hays failed to pay £8,987 to 450 workers, while Mitie underpaid £17,893 to 91 workers.

While the list included a few multinational businesses and high street names, many of the companies are small and in consumer-facing industries, such as hotels and restaurants, where staff are often paid close to minimum wage.

Other businesses that were highlighted as underpaying staff are in care homes and childcare nurseries.

The largest underpayment was by the Challenge Network, a charity now in liquidation, which was found to have failed to pay £154,682 to 3,600 staff.

“We want workers to know that we’re on their side and they must be treated fairly by their employers, which is why paying the legal minimum wage should be non-negotiable for businesses,” said business minister Paul Scully.

Greencore said it “inadvertently made underpayments to some of its employees in the past due to errors in applying administration fees and in calculating salary sacrifice deductions”.

Go-Ahead said that under a practice that ended in 2018, it had deducted earnings “from a small number of employees to refund a training bond because they left the business within 12 months”.

It added that “while the sums involved were small and have long since been refunded, this led to a technical breach of regulations. We regret this and apologise to those who were affected”.

Frasers Group said it had purchased the assets of House of Fraser out of administration in August 2018 “long after the date when these breaches are said to have happened”.

It added: “These breaches are historic and relate to the activities of the old House of Fraser company that is now in administration and is nothing at all to do with any activities of the new House of Fraser business that is owned by Frasers Group.”

Hays said the “underpayment was wholly unintentional and wasn’t widespread”, adding “this relates to a very small number who were underpaid by a small amount due to an isolated administrative error”.

Hays said that as soon as the issue was identified in 2018 “the correct rate was applied, workers were immediately reimbursed, and they were satisfied that we had resolved the matter quickly”.

Mitie said: “HMRC accept this was a technical breach, so we are disappointed to have been included on this list.”

More than a third of the companies deducted the costs of items such as uniforms or food from staff wages. Close to 30 per cent of companies made employees carry out unpaid work, such as mandatory training, trial shifts or travel.

A large number also failed to pay the correct rate to apprentices, while a tenth did not increase pay in line with government guidelines. Some businesses paid the wrong minimum wage rate, such as offering a 23-year-old the rate for a younger worker.

Bryan Sanderson, chair of the Low Pay Commission, which advises the government on the level of statutory pay, said: “The minimum wage . . . only works if everyone without exception obeys the law.”



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