The British government on Thursday (August 5) named and shamed 191 employers for minimum wage breaches in a bid to clamp down on abuses of workers' rights, including retail giant John Lewis and Pret A Manger.
John Lewis. Credit: Mike Traboe / Flickr (Licence: CC2)
John Lewis was among the employers found by the UK government to have breached minimum wage laws. Credit: Mike Traboe / Flickr (Licence: CC2)
Ministers estimate as much as £2.1 million (€2.4 million) is owed to over 34,000 workers at these chains for breaches that took place between 2011 and 2018.
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Many of these employers have been ordered to pay back what they owe and fined an additional £3.1 million (€3.6 million) for the breaches.
The minimum wage - referred to in the UK as the "national living wage" - went up by 19p for over-25s back in April to account for increases in prices attributed to inflation, rising to £8.72 (€10.25) per hour.
This means these companies were still operating under older rules, back when the minimum wage was £7.83. Minimum rage has gradually increased year-on-year since 2010, although it has still not managed to keep up with inflation - although exact numbers are still up for debate.
The SME "Living Wage" argues the outside London living wage should come to around £9.50 (€11.16) per hour. It also argued that, within London, the living wage should be £10.85 (€12.75).
The government has revealed it is likely many of these breaches were unintentional. Minimum wage breaches can occur when a worker is paid on or around the minimum wage but sees reductions from items such as uniforms or accommodation - or anything outside of regular taxation - that knocks it below the threshold.
The government have since stipulated that this should not be happening and that measures should be in place to prevent this from occurring.
47% of the employers caught fell into this trap, whereas 30% failed to pay workers for all the time they had worked, such as when they worked overtime, and 19% paid the incorrect apprenticeship rate.
"Our minimum wage laws are there to ensure a fair day’s work gets a fair day’s pay – it is unacceptable for any company to come up short," Business minister Paul Scully said. " All employers, including those on this list, need to pay workers properly."
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"This government will continue to protect workers’ rights vigilantly, and employers that short-change workers won’t get off lightly," he added.
John Lewis revealed many of the breaches listed - which involved 19,000 of their employees being underpaid by around £60 (€70) each, - happened "nearly four years ago", and was due to the fact workers were not paid accordingly during months where they worked longer hours.
The government has changed the law so that employers working variable hours count as salaried workers, which should prevent incidents such as this.
This is particularly odd as John Lewis is a worker co-operative - a type of employee-owned business, commonly associated with left-wing politics - meaning, it should have a more progressive approach to wages.
Pret a Manger also revealed its breaches date to 2019, when 33 employees wanted to allocate paychecks to childcare vouchers, according to the FT. The government has also made amendments to the law in this regard, changing the rules of voluntary salary sacrifice schemes under minimum wage.
Other companies found in violation of minimum wage include Pontins, McColl's and One Stop.
Many of the breaches listed affected apprentices, the government revealed. This has spurred ministers to release guidance on "how to pay apprentices properly."
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However, there may also be the issue of workers not knowing what their rights are, and who may not complain even if they notice any breaches.
If minimum wage breaches are to be truly eradicated, then workers must be educated on their rights under the law, and the correct measures to take should breaches be noticed. They should also be properly informed on any salaries or employment benefits.
The UK's minimum wage laws apply everywhere in the UK, including in the devolved powers of Scotland, Wales and Northern Ireland.
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