Employers Caught Flouting Minimum Wage Law Named and Shamed


The Law Of... getting a minimum wage

The Department for Business has released a list of almost 200 employers caught flouting UK law and failing to pay the National Minimum Wage. David Hession, a Solicitor specialising in Employment Law, examines why it is important that employees know their rights and ensure they get the wages they are entitled to.

Employers Caught Flouting Minimum Wage Law Named and Shamed

Short-changing the workers

The UK's first ever National Minimum Wage (NMW) was introduced in 1999 by a Labour government in an effort to stamp out exploitation of the low paid. This has been supplemented by the National Living Wage which was introduced on 1st April 2016. This new legislation has attracted a lot of publicity that has brought the issue of minimum pay into the public spotlight.

However, seventeen years on and it would appear there are still those who consider themselves above the law when it comes to the treatment of their employees.

The published list named and shamed a total of 197 companies who had failed to pay the NMW, with the combined sum of monies owed totalling an eye-watering £465,391. Businesses listed included Brighton & Hove Albion Football Club, who owed 1 worker over £2,800, and the San Lorenzo restaurant in Wimbledon, whose arrears added up to £99,542 split between 30 of its staff.

Sports Direct facing fines

Since 2013, the Government has released 'name and shame' lists featuring companies that have been issued with Notices of Underpayment (NoU) that exceed £100. The latest is the largest of its kind and comes hot on the heels of the Sports Direct debacle, where it was discovered that workers at its Derbyshire warehouse were not only suffering under 'Dickensian' working conditions, but also not in receipt of the full National Minimum Wage. The high street chain has since been hauled up before a Commons select committee and, along with the employment agencies it used to source staff, faces fines of up to £2million. They are also now obliged to reimburse affected staff with back pay totalling around £1million.

Unfortunately, these aren't isolated cases and the Department for Business, Innovation and Skills' list would suggest underpaying staff is a problem that shows little sign of going away.

National Minimum Wage rates

At present (2016), the minimum hourly rates that an employer has to pay are as follows:

  • 25 and over – £7.20 (National Living Wage)
  • 21 to 24 – £6.70
  • 18 to 20 – £5.30
  • Under 18 – £3.87
  • Apprentice – £3.30

The National Minimum Wage rate changes every October, while the National Living Wage rate updates in April.

Concerning minimum wage legislation, David Hession comments:

"If you work in the UK and you don't fall within the exceptions – such as self-employed, a member of the armed forces, a voluntary worker, or on a government work scheme – then you are entitled to the National Minimum Wage or National Living Wage. It is also illegal for employers to make up an employee’s wages with 'perks', such as customer tips, food allowances, or any other fringe benefit."

"Despite this, it has been shown that some employers are still not adhering to the law, often using a variety of creative excuses to avoid their responsibilities."

"In instances where an employee suspects they might not be receiving the full amount they're entitled to, they should firstly speak to their manager and ask how their pay is worked out. If this isn't possible, as might be the case for a variety of reasons, or they don't gain a satisfactory response, then they should involve their trade union – if they belong to one – or the conciliation body Acas."

"If legal redress is the only option remaining, whether though a tribunal or the courts, then advice should be sought from an employment specialist."

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