Large companies breaking minimum wage laws

Posted by Tom Line in Personal Finance on 20 January 2015 - Tom worked as a Credit Analyst at checkmyfile until 2015

A further 37 firms have been named and shamed by the government for breaching the law, in regards to paying employees the National Minimum Wage. The government has already exposed 55 employers since October 2013, when it first started the policy of publicly releasing the identity of offending firms.

The list released by the Department for Business, Innovation and Skills, is the single biggest yet, showing that there are still firms out there flouting the strictly enforced law. The 37 companies will be fined a total of £51,000 and must also pay affected staff the £177,000 they were underpaid.

Business Minister Jo Swinson says, “Paying less than the minimum wage is illegal, immoral and completely unacceptable. If employers break this law they need to know that we will take tough action by naming, shaming and fining them as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.

“We are also looking at what more we can do to make sure workers are paid fairly in the first place. As well as being publicly named and shamed, employers that fail to pay their workers the National Minimum Wage face penalties of up to £20,000. We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker rather than per employer”.

Among the companies involved were Hennes & Mauritz (H&M) and Welcome Break. H&M failed to pay £2,604.87 to 540 workers, an average of £4.82 per worker. H&M said that errors with its time logging systems led to the employees being underpaid, where as Welcome Break stated that an IT system was partly to blame for 20 employees being underpaid a total of £1,318.70.

Other firms have underpaid staff by thousands of pounds. The full list can be seen on the department page of the government website.

HMRC’s enforcement budget is set to be increased by £3 million, to allow it to continue investigating employers who fail to meet their requirements under the National Minimum Wage Act.

TUC general secretary Frances O'Grady praised the efforts made by the government although he believes much more could be done, stating, "It's good to see the government getting tough on bad bosses who cheat hard-working employees out of the pay they're legally entitled to. But with over 600 employers being caught underpaying each year, those named and shamed today are only the tip of the iceberg”.

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