Missing the Mark: Minimum Wage Failings​

By Rachel Strickland​
The Story
Last week, the UK government released a list of 191 companies who failed to meet statutory minimum wage requirements during 2011-2018.

Finding that 34,000 workers were owed £2.1 million, HMRC has dished out a hefty £3.2 million in fines to add to the bruised reputation of those named and shamed by the government (Financial Times). While many of the breaches do not appear deliberate, Business Minister Paul Scully has stated "employers that short-change workers won't get off lightly" (gov.uk).

The offenders present an eclectic mix from the Body Shop chain, Worcestershire Cricket Club, Pret A Manger, Welcome Break, and adding to a tumultuous year for the retailer – John Lewis.

In turn, the companies presented a variety of defences:
  • John Lewis claimed a “technical breach” as workers historically received variable pay across the month to help them budget (Financial Times).
  • Pret A Manger wrongly allocated salary to childcare vouchers after a government rule change (Financial Times).
  • Welcome Break’s failures came down to its policy on team member uniforms (BBC).
  • Martin McColl’s inaccurately paid staff for the time they spent opening and locking-up stores (Financial Times).
What It Means For Businesses And Law Firms
This story coincides with a push by the government to enforce tougher penalties for failing to pay the minimum wage. Recently, it announced plans to create a single enforcement body to govern employment rights such as holiday pay and pensions (Ashurst).

Indeed, Labour’s Shadow Secretary for Employment Rights, Andy McDonald, highlighted that just six employers in the last six years have been prosecuted for failing to meet the minimum wage despite more than 6,500 breaches. He stated “laws protecting workers aren’t worth the paper they are written on if they are not enforced” (Independent).

More broadly, the UK government has pledged to end ‘low pay’ (pay below two-thirds of the hourly median) by 2024. This is unlikely to be solely through a higher minimum wage but also by targeting short-hours contracts and employment insecurity (Financial Times).

With regulatory change on the horizon, businesses will need employment advice to avoid being caught by a new enforcement body and any impending employment regulation.