Hundreds of companies failing to pay minimum wage

DebenhamsImage copyright
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Debenhams accidentally underpaid 11,000 of its staff

The government has named 360 businesses which have failed to pay either the National Minimum Wage (NMW) or the National Living Wage (NLW).

Among them are well-known names like Debenhams, Subway, Lloyds Pharmacy and St Mirren Football Club.

More than 15,500 workers had to be paid back nearly one million pounds.

But that may represent just the tip of the iceberg: The Office for National Statistics has calculated that 362,000 jobs did not pay the NMW in April 2016.

The biggest offenders were employers in hairdressing, hospitality and retail.

One worker at a dental practice in London’s Harley Street was refunded nearly £12,000.

Minimum Wage

The fashion store Debenhams had to re-pay £134,000 to more than 11,000 staff – more than half of its shop workers – after an accounting error left each of them around £11 short in wages.

The company was fined £63,000.

A spokesperson said, “As a responsible employer Debenhams is committed to the National Minimum Wage, and as soon as the error was identified by a routine HMRC audit last year, we reimbursed all those affected.”

See the full list businesses here.

Excuses used by businesses for not paying the full basic wage included using tips to top up their pay, making reductions to pay for a Christmas party, or making staff pay for their own uniforms.

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Hairdressers are amongst the worst offenders, the government said

For the first time the list includes firms which failed to pay the National Living Wage, which was introduced on 1 April 2016 for workers over the age of 25.

The current rate is £7.20 an hour. Those under 25 receive the NMW, currently £6.95 for 21 to 24 year-olds, and £5.55 for 18 to 20 year-olds.

‘Higher fines’

In total the 360 businesses that broke the law were fined £800,000.

However the TUC said that was not a big enough deterrent. It called for 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.”

The ONS has said that 1.3% of employees are not being paid the minimum, amounting to 178,000 full-time workers, and 184,000 part-time workers.

But the TUC believes that even that number is an under-estimate, as it does not take into account those working in internships, or those who may be wrongly classified as self-employed.