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Government names and fines 260 companies for underpaying workers £1.7 million

The government has fined 260 employers, including major household names, for failing to pay 16,000 workers at least national minimum wage (NMW) rates.11 Dec 2017

The Department for Business, Energy and Industrial Strategy said the employees had been underpaid by £1.7 million, and fined employers £1.3m for underpayment. More workers were affected than in any previous round of 'naming and shaming'. Since 2013 the government has identified £8m in back pay for a total of 58,000 workers.

Retail, hairdressing and hospitality businesses were among the most prolific offenders and reasons for underpayment included failing to pay employees travelling between jobs, deducting money from pay for uniforms and not paying for overtime.

Tax expert Paul Noble of Pinsent Masons, the law firm behind, said the list of offenders showed it was not just small employers that could be targeted on NMW issues. 

“HM Revenue & Customs are increasingly targeting larger employers who often become unstuck because of the complexity of the rules rather than setting out to pay employees under the legal rates.  To avoid the risk of featuring on these lists and a penalty of 200% of the underpayment, employers should continually review what they pay and 'self-correct' if problems are identified,” Noble said.

The worst offender in the latest list was a flexible workforce provider which had underpaid 2,558 workers a total of more than £469,000. Another recruitment company had failed to pay £310,000 to 1,421 workers. Major retailers were also among the most serious underpayers, with one company underpaying nearly 10,000 employees.

Following legislative changes in April 2016 the failure to apply the NMW is a strict liability offence. The financial penalty for employers who fail to pay staff at least the minimum wage to which they are legally entitled is 200% of arrears, although the overall maximum penalty is £20,000 per worker.

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