Employers Fined for Breaking National Minimum Wage Laws
Date: 26th March 2018 | Categories: Employment law
The Government have named and shamed nearly 180 employers for underpaying more than 9,000 minimum wage workers by £1.1 million. In addition to recovering back pay for 9,200 workers, the Government also fined employers a total of £1.3 million for breaking National Minimum Wage laws. The worst offending sectors on this occasion were retailers, hospitality businesses and hairdressers.
This latest naming list comes a month after the announcement of the Government’s commitment to require employers to itemise payslips to show the number of hours paid for, where a worker is paid on an hourly rate basis. This step should assist low paid workers to determine whether they have been paid correctly. The news also comes ahead of the next rate rise on 1 April, further details of which can be found in our recent article about Statutory Rates Rises.
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Business Minister Andrew Griffiths stated, “There are no excuses for short-changing workers. This is an absolute red line for this Government and employers who cross it will get caught – not only are they forced to pay back every penny but they are also fined up to 200% of wages owed. Today’s naming round serves as a sharp reminder to employers to get their house in order ahead of National Minimum Wage rate rises on 1 April.”
Named and Shamed
Topping the list in this naming round was the restaurant chain Wagamama which failed to pay £133,212.42 to 2,630 workers. Wagamama’s spokesperson is reported to have attributed the breach to a failure to account for uniform payments stating, “In the past we didn’t realise that asking our front of house staff to wear casual black jeans or skirt with their Wagamama branded top was considered as asking them to buy a form of uniform and so we should have paid them for it. Lots of other businesses were also unaware of this regulation around casual wear. We have gladly made payments to current and previous employees who missed out dating back from 2016 to 2013. We have also updated our uniform policy and we now pay a uniform supplement to cover the black jeans.”
Second on the list was Marriott Hotels who failed to pay £71,722.93 to 279 workers, followed by TGI Friday’s who failed to pay £59,347.64 to 2,302 workers.
In similar circumstances to Wagamama, TGI Friday’s have reportedly stated that the error arose as a result of a failure to take into account the purchase of black uniform shoes; an historic payment which team members have since been reimbursed for.
Guidance for Employers
- These cases involving big businesses serve to highlight that often the issue may not actually be a failure to pay at the required hourly rate.
- It is important for all organisations to look at the pay and benefit packages for their workers as a whole to ensure that other obligations such as uniform costs are taken into account when determining whether National Minimum Wage obligations have been met.
- Keep up to date with legislation changes which can affect your organisation – Wirehouse provide guidance and support for all kinds of business to ensure you remain legally compliant.
- Stay up to date with all the relevant changes to Employment Law legislation by reading Wirehouse news updates.
For advice on all aspects of Employment Law, please contact our dedicated Wirehouse team on 0333 3215005 or email us.