Nearly 200 firms named and shamed for minimum wage underpayment

But experts call for less shaming and more support in paying staff correctly as many companies listed had already corrected historic wage errors

Nearly 200 firms have been named and shamed by the government for failing to pay the minimum wage, as experts call for less shaming and more support to help firms identify and pay the correct amount.

The government has published a list of 191 companies, including Pret a Manger, John Lewis and The Body Shop, who all at some point broke minimum wage law between 2011 and 2018.

The list includes firms of all sizes and from a variety of sectors, including football clubs, care homes, food manufacturers and laundrettes.

In total, the named companies were told to reimburse more than 34,000 workers a total of £2.1m in underpaid wages, and together paid £3.2m in fines to HMRC.

Paul Scully, the business minister, said the minimum wage laws were there to “ensure a fair day’s work gets a fair day’s pay. It is unacceptable for any company to come up short.”

However, many of the breaches appear to be either unintentional or have already been resolved.

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Nearly half (47 per cent) of the firms were on the list for wrongly deducting pay from wages for things like uniforms and expenses, while just under a third (30 per cent) of the firms were on the list for failing to pay workers for all the time they had worked – for example, failing to pay overtime.

Another 19 per cent were on the list for paying the incorrect apprenticeship rate.

A spokesperson for John Lewis told People Management it was “surprised and disappointed” at its inclusion on the list, saying that the issue arose because it “smooths” wages so that employees on variable pay receive the same amount each month to help them budget. The firm had underpaid around 19,000 employees by an average of £49 each.

Its average hourly minimum pay has never been below the national minimum wage, the spokesperson said. “This was a technical breach that happened four years ago, has been fixed and which we ourselves made public at the time.”

Similarly, the Body Shop had underpaid around 960 employees by an average of £36 each. A spokesperson for the Body Shop told People Management it had fully cooperated with HMRC during a routine audit in 2018 that identified the need to reimburse a number of staff for uniform costs.

“The affected employees, which include previous and current employees, were reimbursed and our case was closed in 2018. We also reviewed our uniform policy to allow our employees to wear their own clothes,” the spokesperson said.

Pret, which had underpaid 33 employees by an average of £293 each, told the BBC its inclusion on the list was because of a case in 2019 and that it had since made all the necessary payments to staff and HMRC.

Charles Cotton, senior performance and reward adviser at the CIPD, said that instead of naming and shaming firms that had already corrected their errors, the government needed to do more to support businesses in paying the correct amount.

The government should be “going after those who deliberately pay less than the minimum rather than ‘shaming’ those who held up their hands when they realised that they had made a mistake and paid what they owed,” he said.

Cotton added that information was available from the Low Pay Commission to help ensure firms were not accidentally paying staff below the minimum wage. But, he said, many firms, and SMEs in particular, still found it challenging to access legal and other resources to help them pay the correct amount.

“This is why we are calling on the government to create a support network for micro and small firms so they can get the HR information, advice and guidance they need to get the basics right, such as labour law,” he said.