Firms named and shamed over minimum wage failure
ALMOST 140 companies are being “named and shamed” today for failing to pay their workers the minimum wage.
The companies are named by the Government for failing to pay workers the minimum wage, with the list ranging from those with just one employee to supermarket giant Tesco.
Ministers said 139 companies have short-changed their employees and have been fined.
Offending firms failed to pay £6.7m to their workers, in a “completely unacceptable breach of employment law”, said the Business Department.
The list includes five firms from Wales:
Mr Phillip Brookman, trading as Phillip Brookman Decorator & Plasterer, Cardiff, failed to pay £5,141.70 to one worker;
Shades Hair Design Limited (dissolved December 18, 2018), trading as Shades Hair & Beauty, Bridgend CF32, failed to pay £1,487.98 to two workers;
Rainbows Day Care (Pembrokeshire) Limited (dissolved March 3, 2020), Pembrokeshire SA66, failed to pay £1,273.38 to 46 workers;
Smart Solutions (Recruitment) Limited, Newport NP18, failed to pay £1,152.09 to 90 workers; and
Mistsolar Limited, trading as Bridgend Ford, Bridgend CF31, failed to pay £739.00 to one worker.
Business Minister Paul Scully says the list should be a “wake-up call” to rogue bosses, as the department relaunches the naming scheme after a two-year pause.
Investigated between 2016-18, the 139 named companies failed to pay £6.7m to over 95,000 workers in total, in a flagrant breach of employment law. The offending companies range in size from small businesses to large multinationals which employ thousands of people across the UK. Mr Scully said: “Paying the minimum wage is not optional, it is the law. It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list.
“This should serve as a wake-up call to named employers and a reminder to everyone of the importance of paying workers what they are legally entitled to.
“Make no mistake, those who fail to follow minimum wage rules will be caught out and made to pay up.”
One of the main causes of minimum wage breaches was low-paid employees being made to cover work costs, which would eat into their pay packet, such as paying for uniform, training or parking fees.
Also, some employers failed to raise employees’ pay after they had a birthday which should have moved them into a different national minimum wage bracket.
Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates. They also face hefty financial penalties of up to 200% of arrears – capped at £10,000 per worker – which are paid to the Government. Each of the companies named today have paid back their workers, and were forced to pay financial penalties.
A Tesco spokesman said: “Back in 2017 we identified a technical issue that meant some colleagues’ pay inadvertently fell below the national minimum wage.
“We are very sorry this happened and proactively reported the issue to HMRC at the time.
“All our colleagues were reimbursed in full and we immediately changed our policies to prevent this happening again. In most cases the reimbursement was £10 or less.
“Once we uncovered this mistake, we took a proactive, transparent and co-operative approach with HMRC.
“We are therefore extremely disappointed and surprised to have been included in this list as none of the examples shared by BEIS [the Department for Business, Energy and Industrial Strategy] relate to Tesco, and it was Tesco that self-reported this issue to HMRC in the first instance.
“We take our obligations to our colleagues very seriously and all colleagues were reimbursed in full in 2017.”
Hannah Slaughter of the Resolution Foundation commented: “Lowpaid workers have been at the heart of the Covid-19 crisis, keeping the country afloat as lockdowns come and go.
“These workers should be paid properly, and restarting the Government’s naming and shaming regime will help to clamp down on firms flouting the minimum wage.”
TUC general secretary Frances O’Grady said: “It’s a national scandal that so many workers, many of whom are key workers, aren’t being paid the minimum wage.
“Many of those who fail to pay their workers the minimum wage won’t be named today. The Government raised the threshold for naming employers compared with the old scheme, meaning fewer bad bosses are exposed.”
Len McCluskey, Unite general secretary, said: “It’s good to see that robbing employers are being shamed, deservedly, again, but it would be far better to make stealing from them unappealing in the first place.
“Too many bad bosses get away with it. The rogues don’t fear the inspector’s knock at the door.
“They probably think, with justification, that they have more chance of winning the lottery than being caught for their crimes.”