High street firms’ minimum wage breaches may be ‘tip of iceberg’?
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Many more employers may face fines and demands for back payment of wages in the coming months, unions and legal experts have warned – as policy around uniforms, improper reimbursement of expenses and ‘genuine mistakes’ were blamed for almost 200 employers failing to pay the minimum wage.
Restaurant chains Wagamama, TGI Fridays and high-street retailer Karen Millen – along with hotel group Marriott – were among the 179 UK employers the government said had failed to pay nearly 10,000 workers the correct minimum.
The Department for Business, Energy and Industrial Strategy (BEIS) released figures last week revealing that hospitality, hairdressing and retail were the worst offending sectors. Wagamama topped the list of individual employers, underpaying a total of £133,212 to 2,630 employees, while TGI Fridays failed to pay £59,348 to 2,302 staff.
Wagamama said there had been a ‘misunderstanding’ on staff uniform rules and admitted that by stipulating specific uniform colours, it was inadvertently expecting staff to pay for their own uniforms.
The employers were collectively required to compensate workers a total of £1.1m in back pay and pay government fines of £1.3m. The BEIS fines come ahead of the national minimum wage increase next month, following recommendations from the Low Pay Commission.
From April, the national living wage will increase from £7.50 to £7.83 for workers aged 25 and up, and from £7.05 to £7.38 for 21- to 25-year-olds.
“Employers who pay staff close to minimum wage need to be particularly careful they don’t inadvertently breach the law,” said Julia Kermode, chief executive of the Freelancer & Contractor Services Association. Unpaid breaks, requiring staff to arrive early for their shift and time spent in meetings could all lead to underpayment of wages, Kermode added.
Euan Lawrence, employment law expert at Blacks Solicitors LLP, warned that employers making deductions from staff for the cost of the Christmas party could also fall foul of the law if these lowered employees’ wages to less than the minimum wage. “Moreover, additional payments such as tips, service charges and premiums for working at unsociable times should not count towards wages. BEIS makes that absolutely clear,” he said.
If you’re concerned you’re not paying employees correctly, please get in touch at [email protected] or call us on 01386 751 740