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High-Profile Retailers Failed to Pay Staff Minimum Wage
Marks and Spencer, WHSmith, and Argos are among the high-profile retailers named and shamed by the UK government for failing to pay staff minimum wages. The Department for Business and Trade has released details of 202 firms that have left 63,000 low-paid workers out of pocket for a total of £5 million. Investigations by HM Revenue & Customs between 2017 and 2019 resulted in fines totaling around £7 million, with the offending companies also repaying their employees.
WHSmith, despite reporting a pre-tax profit of £63 million, tops the list of rule-breaking by underpaying 17,607 employees for a total of more than £1 million. Lloyds Pharmacy failed to pay more than £900,000 to 7,916 workers, while Marks and Spencer and Argos, owned by Sainsbury’s, left thousands out of pocket with £578,000 and £480,000 respectively. Even Oxford United, a football club, and Warrington Wolves, a rugby league team, were among the companies that failed to pay their staff properly.
The government, determined to address this issue, has sent a clear message to businesses that paying the statutory minimum wage is non-negotiable. Kevin Hollinrake, a junior enterprise minister, stated that businesses should know better than to shortchange hard-working staff, and that those who fail to pay their staff well will face consequences.
Bryan Sanderson, chairman of the Low Pay Commission, emphasized that non-payment of the minimum wage not only harms employees but also undermines fair competition between businesses. While the government did not disclose the size of the fines against individual companies, it did reveal that 39% of employers deducted pay from workers’ wages, and a similar proportion failed to pay workers correctly for their hours of work. More than a fifth paid the wrong rate to apprentices.
The delay in publishing the details of the companies was to allow time for refunds and appeals, according to the government.
Impact on Low-Paid Workers and Response from Companies
The publication of these case details comes at a time when low-paid workers are grappling with the high cost of living due to months of inflation. In April, the government raised the national minimum and living wage by 9.7%, a move that was expected to boost the incomes of 2.9 million workers.
Marks and Spencer responded to being included in the list by stating that it was due to an unintended glitch from four years ago. The company acknowledged that temporary staff were not paid on time but rectified the error as soon as they became aware of it. They also claimed that their minimum hourly wage has never been lower than the national minimum wage.
WHSmith admitted that their underpayments were caused by misinterpreting how minimum wage rules applied to their staff uniform policy. They highlighted that this issue was also faced by other employers and called it a real mistake that was immediately rectified.
Lloyds Pharmacy also claimed that their rule-breaking was unintentional and related to staff uniforms. They assured that workers were reimbursed once the problem was discovered and emphasized that all of their employees were paid above the national minimum wage.
Argos owner Sainsbury’s said their underpayments were also rectified and linked to an error discovered in 2018, which dated back to 2012, before their acquisition of the business.
Oxford United and Warrington Wolves did not respond to requests for comment regarding their inclusion on the list.
Expanding on the Topic: Addressing Wage Inequality and Promoting Fair Pay
Wage inequality and unfair payment practices have been prevalent issues in the UK and around the world. While the government’s publication of the list of companies failing to pay their staff minimum wages is a step towards holding them accountable, there is still much work to be done in eradicating these practices completely. In this article, we will explore the impact of wage inequality and delve into measures that can be taken to promote fair pay in all industries.
The Significance of Fair Pay
Providing fair pay to employees is not only an ethical responsibility for businesses but also crucial for ensuring a thriving economy. Fair pay plays a significant role in reducing poverty, increasing job satisfaction, and improving overall productivity. When workers receive fair compensation for their hard work, they are more motivated and engaged in their roles, leading to higher levels of performance and innovation.
Engaging in fair pay practices also helps businesses attract and retain top talent. Employees are more likely to stay loyal to companies that value their contributions and compensate them appropriately. Moreover, fair pay practices contribute to a positive employer brand, enhancing a company’s reputation and attracting skilled individuals who seek ethical workplaces.
Steps to Achieve Fair Pay
While addressing wage inequality requires comprehensive systemic changes, there are several steps that businesses can take to promote fair pay within their organizations:
- Conducting Regular Pay Audits: Companies should regularly review their payment structures and conduct pay audits to identify any discrepancies or gaps. These audits can help ensure that all employees, regardless of gender or background, are receiving fair and equal pay for the same roles and responsibilities.
- Implementing Transparent Salary Policies: Transparency in salary policies is essential for promoting fair pay. Companies should clearly communicate their pay scales and criteria for salary increments, allowing employees to understand how their pay is determined and providing an opportunity to address any concerns or discrepancies.
- Offering Pay Equity Training: Training programs focused on pay equity can help managers and HR professionals understand the importance of fair pay and provide them with the necessary tools to address potential biases or discriminatory practices. These programs should emphasize the importance of merit-based pay and the need to eliminate any unconscious biases that may affect salary decisions.
- Supporting Salary Negotiation: Companies can support employees in negotiating their salaries by providing resources and guidance. This can help ensure that all employees, especially women and underrepresented groups who may be less inclined to negotiate, have an equal opportunity to advocate for fair compensation.
- Advocating for Government Regulations: Businesses should actively support and encourage government regulations that promote fair pay practices. By advocating for policies that address wage inequality and protect workers’ rights, companies can contribute to creating a fairer and more equitable society.
Promoting Fair Pay: A Collective Effort
Achieving fair pay requires collective efforts from various stakeholders, including businesses, government agencies, and civil society organizations. By working together, these stakeholders can drive systemic changes and create a culture of fair pay for all workers. Here are some ways different parties can contribute:
Businesses
- Lead by Example: Businesses should prioritize fair pay within their organizations and set an example for others to follow. By ensuring that their own pay practices are fair and transparent, companies can inspire others to do the same.
- Collaborate with Stakeholders: Companies should collaborate with other businesses, industry associations, and labor unions to share best practices and develop industry-wide standards for fair pay. Such collaborations can create a collective voice and push for change at a larger scale.
- Invest in Employee Well-being: Fair pay is not limited to salary alone. Businesses should invest in employee well-being by providing benefits, opportunities for growth, and a positive work environment. This holistic approach to employee welfare contributes to overall satisfaction and employee loyalty.
Government
- Enforce Fair Pay Regulations: Governments should enforce existing fair pay regulations and introduce stricter measures to penalize companies that fail to comply. Regular inspections and audits can help identify non-compliant businesses and ensure that appropriate actions are taken.
- Educate Employers and Employees: Government agencies should educate employers and employees about fair pay regulations, their rights, and the available avenues for reporting wage violations. By raising awareness and providing support, governments can empower workers and discourage unfair payment practices.
- Support Research and Data Collection: Governments should invest in research on wage inequality and collect relevant data to inform evidence-based policies. This data can then be used to assess the effectiveness of existing regulations and develop targeted measures to tackle specific issues.
Civil Society Organizations
- Raise Awareness: Civil society organizations play a crucial role in raising awareness about wage inequality and advocating for fair pay. Through campaigns, publications, and public engagement, these organizations can educate the public and put pressure on businesses and governments to address the issue.
- Provide Assistance and Legal Support: Civil society organizations can support workers who have experienced wage violations by providing legal assistance and guidance. They can also conduct research to identify industries or sectors with significant wage disparities and use this data to advocate for change.
- Engage in Policy Advocacy: By actively engaging in policy advocacy, civil society organizations can bring attention to the need for fair pay and propose policy recommendations that address the root causes of wage inequality. They can collaborate with other stakeholders to influence policy discussions and ensure that the voices of workers are heard.
Conclusion
Addressing wage inequality and promoting fair pay is an ongoing process that requires concerted efforts from all stakeholders involved. While the government’s recent release of companies failing to pay minimum wages is a positive step, sustained action is required to eradicate these practices entirely. Businesses, government agencies, and civil society organizations must work together to create a fairer and more equitable society, where all workers receive just compensation for their contributions. By implementing transparent pay policies, conducting regular pay audits, and advocating for government regulations, we can strive
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Marks and Spencer, WHSmith and Argos are among the high-profile retailers topping a list of over 200 companies named and shamed by the UK government for failing to pay staff wages minimum salary.
The Department for Business and Trade released details of 202 firms on Wednesday that have left 63,000 low-paid workers to the tune of £5m out of pocket.
Breaches of the UK’s minimum wage law, investigated by HM Revenue & Customs between 2017 and 2019, resulted in fines totaling around £7 million, while the offending companies also repaid money owed to their employees.
WHSmith, which reported a pre-tax profit of £63m in its most recent financial year, tops the list of rule-breaking: it underpaid 17,607 employees for a total of more than £1m.
Lloyds Pharmacy failed to pay more than £900,000 to 7,916 workers. Marks and Spencer and Argos, owned by Sainsbury’sleft thousands out of pocket £578,000 and £480,000 respectively.
Football club Oxford United and rugby league team Warrington Wolves were also among the companies nominated.
“Paying the statutory minimum wage is non-negotiable and all businesses, regardless of their size, should know better than to change hard-working staff,” said Kevin Hollinrake, a junior enterprise minister.
The government “was sending a clear message to the law-ignoring minority: pay your staff well or you will suffer the consequences,” he added.
Bryan Sanderson, chairman of the Low Pay Commission, said non-payment of the minimum wage also had a broader impact. “Where employers break the law, they not only do their staff a disservice, but also undermine fair competition between businesses,” he said.
The government did not disclose the size of the fines against individual companies, but said 39% of named employers had deducted pay from workers’ wages, while a similar proportion had failed to pay workers correctly for their hours of work. More than a fifth had paid the wrong rate to apprentices.
Not all underpayments by companies were intentional, but “there is no excuse for underpaying workers,” the corporate department said.
The delay in publishing the details was to allow time for refunds and appeals, the government said.
The publication of case details comes as low-paid workers increasingly grapple with the cost-of-living crisis after months of high inflation. The government raised the national minimum and living wage by 9.7%. in April, a move it said would boost the incomes of 2.9 million workers.
Marks and Spencer said it was included in the list “because of an unintended glitch over four years ago”. The temporary staff were not paid on time and the error was rectified as soon as the company became aware of it, he said.
“Our minimum hourly wage has never been lower than the national minimum wage,” the company added.
WHSmith said its underpayments were caused by misinterpreting how minimum wage rules applied to its staff uniform policy, an issue it said was faced by other employers. “This was a real mistake and was rectified immediately,” he told her.
Lloyds Pharmacy said its rule-breaking was also “unintentional” and related to staff uniforms. Workers had been reimbursed when the problem was discovered, he said, adding that all of his employees were paid above the national minimum wage.
Argos owner Sainsbury’s said its underpayments were also rectified and related to an error discovered in 2018, which dates back to 2012, before the business was acquired.
Oxford United and Warrington Wolves did not respond to requests for comment.
https://www.ft.com/content/50d2310c-8209-4f53-8a92-f7aab622b1d6
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