Minimum-Living Wage Updates
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John Lewis has been included on a list of employers “called and ashamed” by the UK government for having paid staff under the legal minimum Thursday, as ministers try to show they are attacking abuses of workers ’rights.
But the retail group is among many companies frustrated by a lawsuit they say penalizes them for technical violations rectified several years ago – while failing to identify more serious cases of exploitation in many parts of the job market.
The government’s list of the 191 employers sued by HM Revenue & Customs for violations of the minimum wage law between 2011 and 2018 included companies ranging from national sales chains to nursing homes and providers of child care, beauty salons and a stable farm.
The Department for Enterprise, Energy and Industrial Strategy said those calls had owed a total of £ 2.1 million to more than 34,000 workers, and that they had been fined £ 3.2 million more. . Nearly half had wrongly reduced wages from workers’ wages, even for uniforms and expenses; 30 percent had not paid staff for all the time they had worked; and 19 percent had paid the wrong apprenticeship rate.
“Our minimum wage laws are here to ensure that a fair working day receives a fair wage – it’s unacceptable for any company to come short,” said Paul Scully, business minister.
But John Lewis said the association was “surprised and disappointed” to be called now for “a technical violation that happened four years ago, has been repaired and that we ourselves made public at the time.”
The violation – which has led to more than 19,000 understaffed staff members by around £ 60 each – happened because the partnership had calmed pay so that employees who varied hours received a regular monthly salary, helping them to the balance sheet. But this meant that workers ended up being paid technically below the minimum wage in a few months when they had worked more hours.
John Lewis said the average minimum wage for now had never fallen below the minimum wage. Since then the government has changed the rules to allow workers with variable hours to be classified as salaried.
Pret A Manger sandwich chain, also called, said its case was dated 2019 when it inadvertently broke the rules allowing 33 employees to attribute a portion of their salary to childcare vouchers. Subsequently, the government changed the rules on the interaction of voluntary wage sacrifice schemes with the minimum wage, “in recognition of the benefits they can bring to employees”.
Other well-known names on the list include Martin McColl’s, the retail chain, which had not paid staff for the time they spent opening and closing businesses outside of hours. McColl’s said it had taken immediate action when it became aware of the problem in 2018 and had introduced robust measures to record working time.
Violation of the rules by larger chains tends to affect a large number of staff but involves relatively small sums of money. Most employers called by HMRC, however, are small businesses where a few staff members have suffered much larger losses, sometimes running into the thousands – with problems mostly prevalent in nursing homes and health care providers. childcare.
Labor market experts say the real problem with enforcement is that HMRC does not have enough resources to proactively clean up so many small businesses and relies on workers to bring in claims – which is the lowest. paid tends to be the least likely to do.
“The low volume of complaints from workers is a serious barrier to effective enforcement of the minimum wage,” said Bryan Sanderson, chairman of the independent Low Pay Commission. In 2019-20, HMRC received only 3,332 reports of underpayment, he added – while LPC research suggests that 420,000 workers, a fifth of those paid near the minimum wage, have changed in a short time.