Businesses Failing to Pay Minimum Wage

A significant number of UK businesses have been outed by the government for failing to pay many of their employees minimum wage.

On 15 February the Department of Business, Innovation and Skills published a list of names that have failed to pay minimum wage to their employees as part of a tactic to shame businesses into complying with the law. The list is comprised of a record-high 360 names, amongst which included Debenhams, St Mirren football club and the Avant Garde pub in Merchant City.

Business Minister Margot James said, “Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it.

“That is why we have named and shamed more than 350 employers who failed to pay the legal minimum, sending the clear message to employers that minimum wage abuses will not go unpunished.”

As a result of these businesses’ failure to comply with minimum wage legislation, it is estimated that more than 15,500 workers have been underpaid, which amounts to around £995,223 in lost wages.

Some supporters of the businesses defended their underpaying of employees by saying that it had occurred because tips were used to make up pay, or that wages had been docked to pay for Christmas parties or staff uniforms. High street retailer Debenhams also blamed a technical error in its payroll calculation, which led to many employees being underpaid by around £10 in 2015.

The government’s actions have been praised by several unions, with Trade Union Centre general secretary Frances O’Grady stating that “This should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed.’’

However, unions have also called for more prosecutions in this area. There have only been 13 since 2007.

The Shadow Business Secretary, Labour’s Rebecca Long-Bailey, has been critical of both the named businesses and the government’s attitude towards minimum wage.

She said: “It is frankly disgraceful that a record number of employers have failed to pay their workers the basic minimum wage and hopefully the repercussions of being publicly named and shamed will act as a deterrent for other unscrupulous employers.

“However, the fact remains that the current so-called National Living Wage is that in name only. The Chancellor even announced a cut in the rate at the Autumn Statement last year, leaving 2.7 million people over £1,300 worse off by 2020.”