Several highly-regarded UK employers have been called out by the government for underpaying National Minimum Wage (NMW) to their employees. They are among 191 employers identified by HM Revenue and Customs (HMRC) as falling short on their obligations to ensure workers receive at least the statutory minimum wage.
The Department for Business, Energy and Industrial Strategy (BEIS) has published a ‘name and shame’ list of firms that have breached minimum wage laws within the period from 2016 to 2018. This list features some of the UK’s most visited and venerated retail or catering businesses, sparking an uproar for failing to meet their wage responsibilities to their staff.
Notable firms on the list include national staples like Tesco, Pizza Hut, and Superdrug. More than 34,000 workers were underpaid a total of £2.1 million by those ensuing companies.
The biggest contributor to this underpayment was Tesco, which was fined for shortchanging its workers by nearly £5 million in total. It was found that most underpayments related to inconsistencies in payroll regarding overtime hours and a payroll system glitch.
Pizza Hut also made the list for underpaying 10,980 staff a total of £845,936.41. Similarly, Superdrug Stores PLC was punished for underpaying 2,222 workers a total of £15,229.97.
The resurrection of the ‘name and shame’ scheme comes after it was halted in 2018 following criticism that it was overly punitive and harmed the reputation of businesses wrongly listed.
A statement from the BEIS notes that companies who pay their workers less than minimum wage not only face fines but also the prospect of being publicly named under this scheme. This measure aims to discourage businesses from such conduct, as it brings significant reputation risks.
Boston Spa-based company, Ideal Shopping Direct, topped the list in terms of individual underpayment. They underpaid a staff of £419.70 – which was the highest individual underpayment identified in the report.
UK companies violating minimum wage rules were fined a total of £3.2m for the two-year period in question. In addition to financial penalties, these embarrassing public revelations could potentially impact these household names’ consumer goodwill in the long run.
It’s worth noting that the fines imposed are on top of the back pay that the companies must give to the workers who were short-changed. This rectification is paramount in demonstrating a commitment to paying workers fairly, as per the regulations.
UK government minister for Labour Market, Paul Scully, expressed his deterrent stance, warning that any business falling short on their wage obligations will be called to account: “Paying the minimum wage is not optional, it is the law,” Scully said.
Despite the public shaming process, some critics argue the scheme does not go far enough to discourage employers from breaching minimum wage laws. They maintain that larger fines and stricter penalties, including potential prison sentences for the most serious offenders, are needed to ensure employers fully comply with the law.
The range of companies on the list highlights the ongoing issues with low pay and the importance of vigilance in enforcing minimum pay standards. This incident proves to be a stark reminder for companies to remain compliant with wage regulations to avoid financial and reputational damage.
Original Source: https://www.personneltoday.com/hr/well-known-employers-named-for-nmw-underpayments/
