Employment News
News added on 04.01.2021
National minimum wage
Government names rogue minimum wage employers
In its first press release issued since July 2018, the government has named 139 employers who have failed to pay the national minimum wage, including the national living wage, to over 95,000 workers, amounting to unpaid wages of £6.7 million. Where did these employers go wrong and how does this naming and shaming exercise differ from previous exercises?
The 139 named employers include some of the UK’s biggest household names - Tesco, Superdrug and Pizza Hut - as well as small businesses. The most common types of national minimum wage (NMW) breach among employers in this naming round were:
- deducting pay from workers’ wages, taking their pay below the NMW, e.g. deductions for food/meals, parking permits, training costs, uniforms and the cost of (or lost) work equipment
- failing to pay workers for working time, with unpaid working time including additional time before or after a worker’s shift, rounding clock-in time to the nearest hour, travel time, incorrectly classifying a worker as salaried with the fixed salary not covering all of the hours worked, and issues with final pay where employment had come to an end
- failing to pay the correct rate to apprentices, such as where the worker was aged over 19 and had completed the first year of their apprenticeship or incorrectly classifying the worker as an apprentice and then paying them the apprentice NMW rate
- failing to pay the uprated NMW, e.g. failing to increase a worker’s pay after they had a birthday which should have moved them into a different NMW bracket and failing to uplift pay after the annual 1 April NMW increases.
Employers who pay workers less than the NMW are required to pay back arrears of wages to the worker at current NMW rates. In addition, they face hefty financial penalties of up to 200% of arrears, capped at £20,000 per worker. Each of the employers named in the press release have now paid back their workers and were forced to pay financial penalties.
The most common reason for underpayment related to wage deductions that took workers’ pay below the minimum wage, such as where a worker incurs costs from expenditure connected with the job, for example, uniform, meals or training costs. As the government has committed to being more transparent about the types of breaches found, the press release includes an educational bulletin setting out further details of the main reasons for minimum wage underpayment in this naming round, together with information on what the law says.