Employers "named and shamed" for not paying the minimum wage

A total of 191 employers have been named and shamed by the government for failure to pay the National Minimum Wage (NMW).

Employers named include John Lewis plc, Martin McColl Retail Limited, One Stop Stores Limited, and Welcome Break Holdings Limited.

The policy of naming and shaming has been heavily criticised in the past for naming employers who fell foul of technical interpretations of the legislation and employee benefits rules.

In the current list of employers published, £2.1m was found to be owed to over 34,000 workers as a result of HMRC investigations. The department is responsible for policing the  NMW.

All the breaches took place between 2011 and 2018.

HMRC says that named employers have since paid back what they owed, and were fined an additional £3.2m.

The National Living Wage and National Minimum Wage rates were increased in April 2021.

Minimum wage breaches can occur when workers are being paid on or just above the minimum wage rate, and then have deductions from their pay for uniform or accommodation.

The employers named previously underpaid workers in the following ways:

• 47% wrongly deducted pay from workers’ wages, including for uniform and expenses
• 30% failed to pay workers for all the time they had worked, such as when they worked overtime
• 19% paid the incorrect apprenticeship rate

Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates. They also face financial penalties of up to 200% of arrears - capped at £20,000 per worker - which are paid to the government.

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

HMRC says a significant number of the minimum wage breaches identified affected those on apprenticeships. In this regard the government has published new guidance to ensure employers know exactly what they need to do to pay their apprentices, and all workers, correctly.

Employers need to understand some of the complexities of the NMW in order to avoid being named and shamed, and should have robust procedures in place to minimise the risk of a HMRC enquiry.

If you would like to discuss how to implement NMW policies in your organisation, please contact a member of our Payroll Services team.

Payroll information

For more payroll information, check out our Payroll Knowledge Hub.