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Firms 'shamed' by government for failing to pay minimum wage

Scores of companies are being “named and shamed” by the Government for failing to pay workers the minimum wage, ranging from those with just one employee, to supermarket giant Tesco. 
Tesco in Peterborough
Tesco is among the hundreds of companies named and shamed by government over minimum wage failure (Photo: Google Maps)

Ministers said 139 companies have short-changed their employees and have been fined. 

Offending firms failed to pay £6.7 million to their workers, in a “completely unacceptable breach of employment law”, said the Business Department. 

Tesco said it was “disappointed and surprised” to have been named as it had identified a technical issue in 2017 that meant some workers’ pay “inadvertently” fell below the national minimum wage, adding that all those affected had been reimbursed. 

Ministers said the list of companies published by the Government should be a wake up call to “rogue” bosses. 

The list includes hotels, garages, a hairdresser, nail salon, car wash and shops found to have underpaid a single employee to thousands of staff. 

The 139 named companies were investigated between 2016 and 2018 and found to have failed to pay £6.7 million to over 95,000 workers. 

This is the first time the Government has named and shamed companies for failing to pay the national minimum wage since 2018, following reforms to the process to ensure only the worst offenders are targeted. 

Business minister Paul Scully said: “Paying the minimum wage is not optional, it is the law. 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. 

“This should serve as a wake-up call to named employers and a reminder to everyone of the importance of paying workers what they are legally entitled to. 

“Make no mistake, those who fail to follow minimum wage rules will be caught out and made to pay up.” 

One of the main causes of minimum wage breaches was low-paid employees being made to cover work costs, which would eat into their pay packet, such as paying for uniform, training or parking fees. 

Some employers failed to raise employees’ pay after they had a birthday which should have moved them into a different minimum wage bracket. 

A Tesco spokesman said: “Back in 2017 we identified a technical issue that meant some colleagues’ pay inadvertently fell below the national minimum wage. 

“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. 

“Once we uncovered this mistake, we took a proactive, transparent and cooperative approach with HMRC. 

“We are 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. 

“We take our obligations to our colleagues very seriously and all colleagues were reimbursed in full in 2017.” 

Hannah Slaughter, of the Resolution Foundation, said: “Low-paid workers have been at the heart of the Covid-19 crisis, keeping the country afloat as lockdowns come and go. 

“These workers should be paid properly, and restarting the Government’s naming and shaming regime will help to clamp down on firms flouting the minimum wage.” 

TUC general secretary Frances O’Grady said: “It’s a national scandal that so many workers, many of whom are key workers, aren’t being paid the minimum wage. 

“Many of those who fail to pay their workers the minimum wage won’t be named today. The Government raised the threshold for naming employers compared with the old scheme, meaning fewer bad bosses are exposed.” 

Len McCluskey, Unite general secretary, said: “It’s good to see that robbing employers are being shamed, deservedly, again, but it would be far better to make stealing from them unappealing in the first place. 

“Too many bad bosses get away with it. The rogues don’t fear the inspector’s knock at the door. They probably think, with justification, that they have more chance of winning the lottery than being caught for their crimes.” 

 By Alan Jones, PA Media