Employers 'named and shamed' for not paying the UK minimum wage: What are the rules?

Employers 'named and shamed' for not paying the UK minimum wage: What are the rules?
Dan Martin
Dan MartinDan Martin Content & Events

Posted: Fri 23rd Jun 2023

The government has publicly named 202 businesses that failed to pay the minimum wage to the lowest paid workers.

The businesses were found to have failed to pay their workers almost £5m to around 63,000 workers during HM Revenue and Customs (HMRC) investigations between 2017 and 2019.

The worst offenders were big high street retailers. At the top of the list was WH Smith which failed to pay £1,017,693.36 to 17,607 employees, followed by:

  • Lloyds Pharmacy which failed to pay £903,307.47 to 7,916 workers.

  • Marks and Spencer which failed to pay £578,390.79 to 5,363 employees.

  • Argos which failed to pay £480,093.58 to 10,399 members of staff.

All three businesses said the non-payments were unintentional and the mistakes have been dealt with.

Small business minister 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."

The government said the named employees underpaid workers in the following ways:

  • 39% of employers deducted pay from workers' wages.

  • 39% of employers failed to pay workers correctly for their working time.

  • 21% of employers paid the incorrect apprenticeship rate.

Bryan Sanderson, chair of the Low Pay Commission, said:

"The minimum wage acts as a guarantee to ensure all workers without exception receive a decent minimum standard of pay. Where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses.

"Regular naming rounds should be a useful tool in raising awareness of underpayment and helping to protect minimum wage workers."

Since 2015, the government has ordered employers to repay over £100m to 1 million workers.

What are the National Mininum Wage rules?

The National Minimum Wage (NMW) and National Living Wage (NLW) apply to all areas of the UK.

The hourly rates change every April. In April 2023 the rates were increased by 9.4%.

The current rates for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age) are as follows:

  • 23 and over: £10.42

  • 21-22: £10.18

  • 18-20: £7.49

  • Under 18: £5.28

  • Apprentice: £5.28

Employers can check if an employee qualifies for NMW or NLW using government guidance.

As well as naming the employers who breached the rules, the government published additional advice about non-payments.

It says:

"Employers are responsible for recognising and recording all working time for their workers. It is important to ensure that all working time is considered for minimum wage purposes when paying staff.

"This can include times when the individual is required to be at work, or when they are required to be available at or near a place of work. Simply paying a worker's rota' or 'contracted' hours may not suffice and may lead to underpayment."

Common causes of unpaid working time are:

  • Compulsory team meetings

  • Waiting time/downtime

  • Time spent travelling

  • Time spent training

  • 'Sleep in' shifts

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance journalist and event host who helps small businesses and the organisations that support them. I'm also Enterprise Nation's news reporter and Bristol Local Leader. I have 20 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from famous names like Sir Richard Branson and Deborah Meaden to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I now freelance for Enterprise Nation as the website's news reporter and as the host of the Small Business sessions podcast. I'm based in Bristol where I run and host regular events with the local small business community in my role as Enterprise Nation's Local Leader for Bristol. I also have strong connections with other major business organisations in the south west region. In total, I've hosted over 100 events including conferences with an audience of hundreds for international brands like Xero and Facebook and live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography.

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