Last week, the government published a list of 202 companies, including several big household names, that have failed to pay the minimum wage to their lowest paid staff members.  

The HMRC investigations into these breaches concluded between 2017 and 2019, so it is to be noted that there is a considerable time lag between the offence and the public naming of the employer.  The named employers were ordered to repay almost £5 million to the 63,000 workers affected, and have faced penalties totalling almost £7 million. The most common forms of underpayment were making deductions from wages (39% of employers) or failing to pay workers properly for their working time (39% of employers). The incorrect apprenticeship rate was found to have been paid by 21% of employers. 

 

The employer with the highest value underpayment of over £1 million to 17,607 workers, WH Smith, claimed the error was due to a misinterpretation of how the legislation related to its company uniform policy. Marks & Spencer explained that their error was due to a technical issue which led to temporary workers not being paid within the correct time periods. A payroll error identified in 2018, which affected some Argos store workers and drivers before Sainsbury's acquisition of Argos, was said to be the cause of Argos's breach.

 

The government say that they name the employers to send a clear message that no employer is exempt from paying workers the statutory minimum wage. Additional advice for employers about breaches and what employers should do to make sure they correctly pay their workers has also been published.  The contrary view is that the naming and shaming list is a rather crude and unfair mechanism, which may focus more on employers whose record keeping allows HMRC to identify technical breaches rather than seek to penalise those employers who are genuinely exploiting and underpaying employees.