finance

Tesco and Pizza Hut named and shamed over minimum wage breaches


Tesco, Pizza Hut and five star luxury hotel The Lowry are among almost 140 companies criticised by the UK government for failing to pay the minimum wage to their workers.

Ministers have publicly named and shamed what they described as “rogue employers” who have breached employment law. 

All 139 companies, which also include Superdrug, St Johnstone Football Club and Müller UK, have been forced to pay back wages to their workers.

This is in addition to financial penalties of up to 200 per cent of the arrears, capped at £10,000 per worker. 

Small business minister Paul Scully said: “It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list.”

In total, these companies failed to pay £6.7m to more than 95,000 workers, according to the government, with the vast majority accounted for by Tesco, which failed to pay about £5m to 78,199 workers. 

Pizza Hut missed out on payments of £845,936 to 10,980 workers, while Manchester’s Lowry Hotel failed to pay £63,431 to 99 workers.

Other companies that were fined include those providing healthcare, nursing, construction, car wash and hospitality services, where many employees are typically paid near or at minimum wages.

The companies were served a notice of underpayment between September 2016 and July 2018 following investigations by HMRC.

The government found that low-paid employees were often being forced to pay for mandatory work costs from their wages, such as for their uniform, training or parking.

Other employers failed to raise employees’ pay after a birthday moved them into a different wage bracket. This is the first time the government has named and shamed companies for failing to pay the national minimum wage since 2018.

Companies have been fined regardless of whether the breach was intentional. 

Tesco said that in 2017 it had identified “a technical issue that meant some colleagues’ pay inadvertently fell below the national minimum wage”, which then led to it reporting the error to HMRC. 

The supermarket said that it was “therefore extremely disappointed and surprised to have been included in this list as none of the examples shared by BEIS relate to Tesco, and it was Tesco that self-reported this issue to HMRC in the first instance”.

Tesco added: “We are very sorry this happened and proactively reported the issue to HMRC at the time. All our colleagues were reimbursed in full and we immediately changed our policies to prevent this happening again. In most cases the reimbursement was £10 or less.” 

Pizza Hut said that “several years ago, along with many other businesses in the sector, HMRC made us aware of an error relating to a historic uniform policy”, adding that there was “never any intent to underpay our employees”.

“In 2018 we completed a wage adjustment for current and former employees working closely with the HMRC to understand who was eligible . . . we are confident that the necessary processes have been fixed to ensure that this will not happen again.”

The Lowry did not respond to a request for comment.

Last month, the government increased national living wage and national minimum wage rates from April 2021.

Every worker is entitled to the national minimum wage, which will be increased by between 1.5 per cent and 2 per cent depending on age bracket, while the national living wage will increase 2.2 per cent to £8.91 an hour for workers aged 23 and above.



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