Primark and Sports Direct are among those named for paying their staff below the legal minimum. It is thought that hundreds of thousands of workers are still not receiving their legal entitlement. The CIPD warns businesses must be prepared for the increase in rates next year.
The Government has named and shamed over 260 employers in the UK for failing to pay their employees the national minimum wage and national living wage. This is ahead of a nationwide rise in the level of both announced for April 2018 in November’s budget.
Around 16,000 workers will be reimbursed £1.7 million after being underpaid by their employer. The main reasons for underpaying employees were due to not paying for overtime, deducting money from pay for uniforms and failing to pay works travelling between jobs.
Primark has been named as the third-biggest offender and is forced to pay back £231,973.21 to 9,735 of their employees. The company has charged their staff for their uniforms meaning they earn less than the national minimum wage. Primark have taken action by renewing their procedures to avoid similar situations from taking place in the workplace. The fashion retailer said that following an audit from HMRC, it had identified an error and the average amount paid per employee was £23.75.
Sports Direct and The Best Connection Group were also named in the top five underpaying companies. The assistant general secretary of union Unite, Steve Turner, has slated the Government for failing to provide employee protections and also failing to reimburse Sports Direct workers their pay after the issue was first raised in a parliamentary enquiry in July 2016.
The head of public policy at the CIPD, Ben Willmott, stated: “large employers with HIR teams should not be making these basic errors”. Examples such as non-payment of overtime should not happen in any organisation, and big organisations have no excuse at all for getting this wrong”.
The Low Pay Commission recommended the national living wage should be increased from £7.50 to £7.83 for workers aged 25 and over following the 2017 autumn budget. Individuals aged between 21 to 24 years will see their minimum pay increase from £.7.05 to £7.83 and young worker and apprentices will also benefit from the pay rise.
Employers need to be aware of the increase in wages so they don’t encounter any problems in the future. The Government will work with professional bodies and employers to ensure the information is widely available. Not only does this apply to big organisations like Primark and Sports Direct, but also smaller firms. There needs to be support put in place for firms who do encounter problems and who don’t understand their obligations.
It’s extremely important HR departments and business leaders ensure they comply with legal requirements. Under the National Minimum Wage Regulations 2015, any deductions made for a uniform that an employee is required to wear, must be considered when calculating the minimum wage.
If you need advice or guidance on paying your employees the correct wage, please contact a member of the HPC team: