Tesco, Pizza Hut, Costco Among Companies Investigated for Short-Changing Employees

By Katherine Webster | January 5, 2021

Category: Labour & Employment

More than 100 companies investigated in the U.K. were found to have paid workers less than minimum wage.

The government says 139 companies that were investigated from 2016 to 2018 short-changed 95,000 employees’ pay by £6.7 million!

Companies Short-Changing Employees ‘Named and Shamed’

The government said the companies that failed to pay the minimum wage ranged from small businesses to large, multinational companies with thousands of employees.

Among the companies called out by the government are Tesco, Pizza Hut and Superdrug, the BBC reported. Hotels, car washes and shops were among the other businesses named.

Ministers described the shortchanging of employees as a “completely unacceptable breach of employment law.”

“There can be no excuses for non-compliance with the minimum wage rates,” Low Pay Commission chairman Bryan Sanderson said in a government news release. “The annual changes are well publicised 6 months in advance following a well understood process.”

“Those affected are among the most needy and vulnerable in our country — the companies concerned should be deeply ashamed of their performance,” he added.

The government said this is the first time it has “named and shamed” companies for National Minimum Wage failures since 2018, after the process was reformed to make sure the worst offenders were the only ones targeted.

How It Happened

The U.K. government said one of the main causes companies failed to pay the minimum wage was to cover other work costs, such as uniforms, training or parking costs, that would take part of employees’ pay packets.

In addition, some employers did not raise the pay of employees after they had a birthday that would have shifted them into another National Minimum Wage bracket.

Tesco told the BBC a technical issue back in 2017 meant the pay of some employees “inadvertently” fell below the minimum wage. The company said it had reported the issue to HM Revenue and Customs (HMRC).

“In most cases the reimbursement was £10 or less,” Tesco said.

Pizza Hut and Superdrug both blamed the error on a previous uniform policy requiring staff to wear certain colors of shoes and trousers.

“It is important to stress that there was never any intent to underpay our employees,” Pizza Hut told the BBC.

Superdrug said the company’s policy had been changed to ensure the issue did not come up again.

According to the Mirror, employers are required by law to pay workers according to the following guidelines:

25 and older: £8.72 an hour
21-24: £8.20 an hour
18-20: £6.45 an hour
16-17: £4.55 an hour
Apprentice: £4.15 an hour

While the government understands not all wage breaches are intentional, the Mirror said, it doesn’t mean employers don’t owe that money.

“Paying the minimum wage is not optional, it is the law” Business Minister Paul Scully said. “It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list.”

The government announced in December the National Living Wage and National Minimum Wage both would increase as of April 2021.

Companies Required To Pay up

Employers who have paid their employees less than the minimum wage will be required to pay back wages at the current minimum wage rates, the government said.

The firms also will have to pay penalties of up to 200% of arrears to the government, up to a maximum of £10,000 per employee.

Each of the 139 companies named by the government has paid their workers back and has also been made to pay penalties.

However, Trades Union Congress general secretary Frances O’Grady said many firms that had failed to pay the minimum wage would go unnamed.

“The government raised the threshold for naming employers compared with the old scheme, meaning fewer bad bosses are exposed,” O’Grady told the BBC.

Help for Employers and Workers

Along with its list of offending companies, the government published a bulletin that included resources for firms and their employees who need help or advice.

The Advisory, Conciliation and Arbitration Service (ACAS) helpline is available to give free, confidential, impartial advice to workers and employers. They can be reached online or by calling 0300 123 1100.

Workers who believe they have been paid less than the minimum wage may submit a complaint to HMRC. HMRC protects worker anonymity and follows up on every worker complaint it receives, including anonymous complaints and those made to the ACAS helpline.

To find out if you are being paid the minimum wage, visit the government’s online living wage calculator.

Do you work for one of the companies “named and shamed” by the government for not paying the minimum wage? Tell us about your experience in the comment section below.

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