Big UK retailers named and shamed for failing to pay minimum wage

Marks and Spencer, WHSmith and Argos are among the high-profile retailers heading a list of more than 200 companies named and shamed by the UK government for failing to pay staff the minimum wage.

The Department of Business and Trade released details on Wednesday of 202 companies that left 63,000 low-paid workers out of pocket to the tune of £5mn.

The breaches of the UK minimum wage law, which were investigated by HM Revenue & Customs between 2017 and 2019, resulted in financial penalties of about £7mn in total, while the offending companies also repaid the money their employees were owed.

WHSmith, which reported pre-tax profits of £63mn in its most recent financial year, topped the list of rule-breakers: it underpaid 17,607 staff a total of more than £1mn.

Lloyds Pharmacy failed to pay more than £900,000 to 7,916 workers. Marks and Spencer and Argos, which is owned by Sainsbury’s, left thousands of employees out of pocket by £578,000 and £480,000 respectively.

Football club Oxford United and rugby league side Warrington Wolves were also among the businesses named.

“Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff,” said Kevin Hollinrake, a junior business minister.

The government was “sending a clear message to the minority who ignores the law: pay your staff properly or you’ll face the consequences”, he added.

Bryan Sanderson, chair of the Low Pay Commission, said failure to pay the minimum wage also had a wider impact. “Where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses,” he said.

The government did not disclose the size of fines against individual companies but said 39 per cent of the employers named had deducted pay from workers’ wages while a similar proportion had failed to pay workers correctly for their working time. More than one-fifth had paid the wrong rate to apprentices.

Not all underpayments by companies were intentional but “there is no excuse for underpaying workers”, the business department said.

The delay in publishing the details was to allow time for repayments and appeals, the government said.

The publication of the details of the cases comes as low-paid workers are increasingly struggling in the cost of living crisis following months of high inflation. The government raised the national minimum and living wages by 9.7 per cent in April, a move it said would boost the incomes of 2.9mn workers.

Marks and Spencer said it had been included on the list “because of an unintentional technical issue from over four years ago”. Temporary staff were not paid within the required time periods and the error was rectified as soon as the company became aware, it said.

“Our minimum hourly pay has never been below the national minimum wage,” the company added.

WHSmith said its underpayments were caused by it misinterpreting how minimum wage rules applied to its staff uniform policy, an issue it said had been faced by other employers. “This was a genuine error and it was rectified immediately,” it said.

Lloyds Pharmacy said its breach of the rules was also “unintentional” and related to staff uniforms. Workers had been reimbursed when the issue was uncovered, it said, adding that all its employees were paid above the national minimum wage.

Argos’s owner Sainsbury’s said its underpayments had also been rectified and related to an error discovered in 2018, which dated back to 2012, before its acquisition of the business.

Oxford United and Warrington Wolves did not respond to requests for comment.