High street fashion chains Monsoon and Accessorize publicly shamed after they didn’t pay minimum wage to 1,400 staff
High street stores Monsoon and Accessorize have been publicly shamed for failing to pay more than 1,400 staff the minimum wage.
The fashion and accessories chain owed more than £100,000 to low-paid staff who had not received their full entitlement, a HMRC review found.
It was forced to repay the money owed to 1,438 workers, as well as a fine of up to £20,000 – reduced to just £10,000 if paid within 14 days.
The sister brands claimed the pay gap was an ‘unintentional breach’ of regulations which affected staff working between 2011 and 2013. It did not reveal last night how much fine it had paid.
By law, all workers must be paid the national minimum wage, which went up by 20p to £6.70 per hour for adults on October 1.
The hourly rate for 18 to 20- year-olds is now £5.30, while it is £3.87 for 16 to 17-year-olds.
Under a ‘naming and shaming’ scheme introduced in 2013, the Department for Business, Innovation and Skills has the power to name companies who owe more than £100 to staff paid less than the minimum wage.
Companies who fail to pay minimum wage are forced to repay any wages owed and are fined 100 per cent of the amount outstanding – up to a cap of £20,000. This is halved if the fine is paid within 14 days.
Business Minister Nick Boles said: ‘Employers that fail to pay the minimum wage hurt the living standards of the lowest paid and their families.
‘As a one nation government on the side of working people we are determined that everyone who is entitled to the National Minimum Wage receives it.’
Monsoon Accessorize Ltd’s code of ethics on its website states it has a ‘ commitment to ethical trading’ and its minimum requirements include ‘fair wages’.
It claimed the problem was caused by the firm ‘unintentionally’ failing to take into account clothing its minimum-wage staff were made to buy to wear at work.
Shop workers in Monsoon or Accessorize stores must wear outfits by the brands, which they can buy at a 25 per cent discount. For minimum wage staff, this pushed their total earnings under the legal threshold.
Around 7 per cent of the stores’ workforce at the time were on minimum wage and the workers refunded will receive an average of just under £73. The stores now pay all staff more than minimum wage and provide a clothing allowance.
+2A spokesman said it had been working with HMRC on its payroll practices, adding: ‘ This review has revealed an historic, unintentional breach of the regulations in respect of its staff discount policies for Monsoon clothing.
‘Monsoon is pleased that this issue has been identified and has already taken prompt action to remedy it.’
The fashion chain was named as the worst offender on a list of 115 companies which failed to properly pay staff a total of £389,000 in wages.
Others in the worst five included Tyne & Wear Riding for the Disabled Association, which owed £27,000 to six workers, Project Security in Doncaster, owing £23,000 to 18 workers, Carl Keith Salons, Prescot, Merseyside, owing £20,000 to five workers, and Exeter & MacKenzie Glass Centre, which owed £14,000 to nine workers.
The others named included hairdressers, a taxi firm, hotels, a nursery school and a funeral director and owed between £104 and £14,000.
Sarah Vero, director of the Living Wage Foundation, said: ‘The National Minimum Wage is intended as a benchmark to avoid exploitation.
‘It’s saddening to hear that a number of employers are failing to implement this properly and we hope that the enforcement of the legal minimums continues to ensure that those at the bottom of the pay-scale are protected and employers regardless of size are held to account.’
TUC general secretary Frances O'Grady said: ‘It's good to see that the Government is naming and shaming more companies who pay their employees less than the minimum wage.
‘ However, today's list of offenders is only the tip of the iceberg. Many more employers are getting away with illegal underpayment.’