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UK – Thousands of minimum wage workers set to receive £2 million in back pay

17 August 2017

More than 13,000 employees in the UK will be refunded approximately £2 million in compensation after government investigations named and shamed firms that did not comply with National Minimum Wage or Living Wage laws.

The Department for Business, Energy and Industrial Strategy published a list of 233 businesses that underpaid workers. They included two staffing firms; Birmingham-based Airport Placements which owed £4,557.43 to 50 workers and Watford-based Skillsdirect which owed £489.91 to two workers.

As well as paying back staff the money owed, employers on the list have been fined a record £1.9 million by the government. Retail, hairdressing and hospitality businesses were among the most prolific offenders.

Since 2013, the scheme has identified £6 million back pay for 40,000 workers, with 1,200 employers fined £4 million.

The government found that Argos was the worst offender, having failed to pay £1,461,881.78 to 12,176 workers. Supermarket giant Sainsburys, who bought Argos last year, flagged the error in February and said the amount was actually £2.4 million for 37,000 people when taking into account both current and former staff, according to the BBC. All the staff at Argos have now received their back pay.

“It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers,” Business Minister Margot James said. “Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.”

According to the government, common errors made by employers in this round included deducting money from pay packets to pay for uniforms, failure to account for overtime hours, and wrongly paying apprentice rates to workers.

HMRC currently have 2,000 open cases still under investigation.

“HMRC is committed to getting money back into the pockets of underpaid workers, and continues to crack down on employers who ignore the law,” Melissa Tatton, Director at HM Revenue and Customs said. “Those not paying workers the National Minimum or Living Wage can expect to face the consequences.”