Hundreds of companies including heavyweights WH Smith, M&S and Argos have been named after being fined for failing to pay workers minimum wage.
Companies, from individual traders to household names, have been ordered to repay 63,000 staff who have lost wages totaling nearly £5m, after breaching the National Minimum Wage (NMW) law.
WH Smith topped the list for failing to pay more than £1 million to more than 17,000 workers, followed by Lloyd’s Pharmaceuticals, which had to repay more than £900,000 to nearly 8,000 of its employees.
Supermarkets and clothing retailer M&S have failed to pay more than 5,000 employees nearly £580,000, while Argos, owned by Sainsbury’s, has paid more than 10,000 workers more than £480,000.
Bingo Buzz Group operator also failed to pay nearly £320,000 to more than 3,000 employees.
“Payment of the statutory minimum wage is non-negotiable and all businesses, whatever their size, should know better than to turn around hard-working employees,” said Small Business Minister Kevin Hollenreich.
The 202 companies were cumulatively fined nearly a further £7m, payable to HMRC, in what ministers said was “a clear message from the government that no employer is exempt”.
39 percent of companies cut employee salaries while a separate 39 percent failed to pay the correct amount for hours worked, and another 21 percent of employers paid the wrong apprenticeship rate.
It followed a 9.7 per cent increase in the statutory living wage, the minimum wage coming into force for nearly 3 million workers across the UK in April 2023.
The payments and fines followed the investigations of the Human Resources Management Committee that ended between 2017 and 2019.
“We are sending a clear message to the minority who ignore the law: pay your employees appropriately or face the consequences,” Hollenrek added.
Low Wage Commission Chairman Brian Sanderson said: “The minimum wage acts as a guarantee to ensure that all workers, without exception, receive a decent level of wages.
“When employers break the law, they not only abuse their employees, but they also undermine fair competition between companies.”
A spokesperson for WH Smith said: “Following a review with HMRC in 2019, it was brought to our attention that we had misinterpreted how statutory pay regulations applied to the uniform policy for employees working in our stores.
“This was a real mistake and it was immediately rectified with all colleagues being compensated in 2019.”
A Sainsbury’s spokesperson said: “In 2018, it was identified a payroll error affecting some colleagues and drivers in an Argos store, dating back to 2012, prior to Sainsbury’s takeover by Argos.
We launched an immediate investigation, along with HMRC, and corrected that at that time. Since then, we have completed the integration of Argos into Sainsbury’s systems which will prevent this from happening again.
“Since our acquisition of Argos, we have made significant investments in wages and Argos’ hourly rate is now in line with Sainsbury’s, an increase of 53 per cent over the past seven years.”
An M&S spokesperson said: “Like many other organisations, M&S was only listed by the NMW due to an unintentional technical issue more than four years ago.
“This simply occurred because temporary associates were not paid within the strict time periods set out in the regulations and this was rectified as soon as we became aware of the problem. The minimum hourly wage has never been lower than the national minimum wage, and no associates have ever been paid less because of this “.
A Lloyd’s Pharmacy spokesperson said: “Lloyd’s Pharmacy can confirm that this relates to historical and unintended underpayments arising from HMRC’s rules around company dress code.
“As soon as we became aware of this, we acted quickly to notify and compensate the affected colleagues. We also updated our uniform policy to ensure it does not happen again.
“Lloyds Pharmacy can confirm that all of our employees are paid above the national minimum wage, and would like to take this opportunity to apologize again to any Lloyds Pharmacy colleagues affected, as well as reassure them of our commitment to fair and equitable pay.”
