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More than 200 companies including M&S and WHSmiths fail to pay minimum wage

Nick Cheek
Written By:
Nick Cheek

The Government has named and shamed over 200 companies for not paying their staff the national minimum wage (NMW).

Some of the UK biggest names on the high street such as WHSmiths, Marks and Spencer and Argos have all been accused of leaving their workers out of pocket. The list was complied following the conclusion of an investigations by the HMRC between 2017 and 2019.

Overall, 202 employers were exposed for failing to meet their minimum wage requirements by almost £5 million in a clear breach of the law. In total, 63,000 workers were left underpaid. Small businesses and traders were also named in the list of firms who have been underpaying workers.

In an attempt to assuage the cost-of-living crisis, from 1 April this year, the Government increased the National Living Wage for those over the age of 23 by 9.7% up to £10.42 per hour, while those are between the ages of 21-22 received an even higher pay rise of 10.9% with an £10.18 statutory hourly rate.

Firms who did pay minimum wage face fines

Those firms who have been found guilty of not paying the legal minimum wage now face financial penalties of nearly £7m. It was revealed that there were three main ways that employers named in the list underpaid workers. A total of  39% of employers deducted pay from workers’ wages, and failed to pay workers correctly for their working time. While a further  21% of employers paid the incorrect apprenticeship rate.

The Minister for Enterprise, Markets and Small Business Kevin Hollinrake said: “Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.

“Most businesses do the right thing and look after their employees, but we’re sending a clear message to the minority who ignore the law: pay your staff properly or you’ll face the consequences.”

Meanwhile, Bryan Sanderson, the chair of the Low Pay Commission said: “The minimum wage acts as a guarantee to ensure all workers without exception receive a decent minimum standard of pay. Where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses.

“Regular naming rounds should be a useful tool in raising awareness of underpayment and helping to protect minimum wage workers.”

An M&S spokesperson said: “Like many other organisations, M&S is only named in the NMW list because of an unintentional technical issue from over four years ago.

“This happened simply because temporary colleagues were not paid within the strict time periods specified in the NMW Regulations and was remedied as soon as we became aware of the issue. Our minimum hourly pay has never been below the national minimum wage, it is currently above it and no colleagues were ever underpaid because of this.”

A WHSmith spokesperson said: “Following a review with HMRC in 2019, and in common with a number of retailers, it was brought to our attention that we had misinterpreted how the statutory wage regulations were applied to our uniform policy for staff working in our stores. This was a genuine error and it was rectified immediately with all colleagues reimbursed in 2019.”

Meanwhile, a spokesperson fro Sainsbury’s, which bought Argos in 2016, said: “Back in 2018, a payroll error was identified which affected some Argos store colleagues and drivers and dated back to 2012 – before Sainsbury’s acquisition of Argos. We launched an immediate investigation, working alongside HMRC, and put this right at the time.

“Since then we have completed the integration of Argos onto Sainsbury’s systems which will prevent this from happening again. Since acquiring Argos, we have made significant investment into colleague pay and the Argos colleague hourly rate is now aligned with Sainsbury’s, representing an average increase of 53% over the last 7 years.”