Companies fined £7m for underpaying minimum wage

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Major high street retailers, WH Smith and Lloyds Pharmacy, are among more than 200 businesses which failed to pay national minimum wage rates to workers

The latest HMRC figures show that 202 businesses failed to pay the national minimum wage rate to 63,000 workers, leaving them £5m out of pocket.

This resulted in fines of £7m, after the government increased the penalties imposed on employers from between 100% and 200% of arrears owed to workers.

Companies on the list range from major high street brands to small businesses and sole traders, in a clear message from government that no employer is exempt from paying their workers the statutory minimum wage. The hospitality sector accounted for nearly a quarter of rule breakers, followed by retail.

Topping the list was WH Smith, which underpaid over 17,600 workers by £1.01m, while Lloyds Pharmacy was hauled up over £903,307 in unpaid salary to 7,916 staff. Argos was also flagged with over 10,000 workers missing out £480,093.

Other high street retailers caught out by the rules included Dune Group and Chanel, while airlines including Buzz Group, now bankrupt, and Loganair underpaid staff, as did Blackpool Pleasure Beach.

The failure to pay the correct hourly rate incidents dated back to investigations conducted between 2017 and 2019.

HMRC said that businesses named in the list have since paid back what they owe to their staff and have also faced financial penalties.

The named businesses wrongly deducted pay from workers’ wages, underpaid staff for hours worked, and one in five paid the wrong apprenticeship rate.

Minister for enterprise, Kevin Hollinrake said: ‘Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.

‘Most businesses do the right thing and look after their employees, but we’re sending a clear message to the minority who ignore the law: pay your staff properly or you’ll face the consequences.’

In April 2023, the national living wage rate (the highest band in the structure) was increased to £10.42 per hour for workers aged 23 and over.

It is expected that the age threshold for the national living wage will be reduced to 21 from April 2024, though this is yet to be confirmed. When it was first introduced, it was payable to workers aged 25 and over.

More information about the national minimum wage, visit BrAInbox today where you can find answers to questions like What's the predicted rate of national living wage for 2024?

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