Primark and Sports Direct top minimum wage underpayment ranking

Sebastian Willnow/DPA/PA Images
Sebastian Willnow/DPA/PA Images

Budget fashion retailers Primark and Sports Direct have topped the latest list of employers to be named and shamed by Government for failing to pay workers the national minimum wage.

The Department for Business, Energy and Industrial Strategy has today published a list of 260 employers failing to pay 16,000 workers a total of £1.7 million.

Business minister Margot James said: “There is no excuse for not paying staff the wages they’re entitled to and the Government will come down hard on businesses that break the rules.

“That’s why today we are naming hundreds of employers who have been short changing their workers; and to ensure there are consequences for their wallets as well as their reputation, we’ve levied millions in back pay and fines.”

Since 2013, the scheme has identified £8 million in back pay for 58,000 workers, with 1,500 employers fined a total of £5 million. This year the Government will spend a record £25.3 million on minimum wage enforcement.

At the top of the list is Best Connection Group, which failed to pay £469,274 to 2,558 workers, followed by Qualitycourse, trading as Transline, which underpaid 1,421 workers £310,302 in total. Both employment agencies were involved in 2016’s scandal surrounding the treatment of workers at Sports Direct’s distribution centre at Shirebrook, Derbyshire.

Sports Direct itself failed to pay £167,036 to 383 workers, while Primark Stores, a subsidiary of Associated British Foods, left 9,735 out of pocket to the tune of £231,973.

A Primark spokesman said: “The company is committed to the national minimum wage and has apologised to the employees concerned. It has also reviewed its procedures in order to avoid this situation reoccurring.”

The most common reasons for firms underpaying staff were failing to pay workers when they were travelling between jobs, not paying overtime and deducting money from staff pay for uniforms.

Primark is understood to have fallen foul of this last issue, having insisted on shop workers wearing black, but refusing to pay for their clothing. It said the average amount of back pay to staff affected was £23.75.

Bryan Sanderson, chairman of the Low Pay Commission, said: “The Low Pay Commission’s conversations with employers suggest that the risk of being named is encouraging businesses to focus on compliance.

“Further, it is good to see that HMRC continues to target large employers who have underpaid a large number of workers, as well as cases involving only a few workers, where workers are at risk of the most serious exploitation. It is imperative that the Government keeps up the pressure on all employers who commit breaches of minimum wage law.”

But Bill Longe, head of employer solutions at tax and consulting firm RSM, said: “The policy of automatic naming and shaming is inflexible and can do unnecessary material damage to the reputation of a company whose only crime is that it has made an innocent error in attempting to operate a complex scheme.

“HMRC recently updated its own guidance on the enforcement of the national minimum wage which explains how employers can work with HMRC to ensure compliance with the regulations and to avoid the financial and reputational penalties when things go wrong. Unfortunately, few people – including national minimum wage compliance officers – know about or understand the policy.

“If HMRC truly wants to encourage employers to operate the NMW rules correctly then it must come forward and promote its policies more clearly and stop the secret under-the-counter amnesties it has adopted in the past.”

Other organisations named and shamed included Subway, Manpower and four football clubs – Bristol Rovers, Falkirk Athletic, Motherwell and Wolverhampton Wanderers.

Retail, hairdressing and hospitality businesses were among the most prolific offenders. The full list is published here.

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