Card Factory ranks first on list of employers failing to pay their employees the national minimum wage
Card Factory ranks first on list of employers failing to pay their employees the National Minimum Wage
Card Factory tops list of employers failing to pay staff members the National Minimum Wage or the National Living Wage. Home Bargains, Wyevale Garden Centres and Odeon & UCI Cinema Group are also among the 239 employers named by the Department for Business, Energy and Industrial Strategy (BEIS) for underpaying their employees.
22,400 workers have been underpaid which equates to a total of £1.44 million owed to the individuals collectively. HM Revenue and Customs are set to issue fines of up to £1.97 million.
It is reported Sportswift, trading as Card Factory, have underpaid 10,256 employees by £430,097.87. The average amount Card Factory owe to their employees was £41.94 each. The arrears dated back to March 2013 and the issue was corrected in November 2016. The Guardian has revealed the chain of greeting card stores have apologised to their staff members, paid them back the correct amount and amended their pay policies.
TJ Morris, trading as Home Bargains, ranked second on the list of organisations failing to pay their employees the minimum wage, as they failed to pay £272,228.44 to 6,743 staff members. Ranking third on the list was John Stanley’s Care Agency, as they failed to pay 91 employees a total of £60,056.80.
Meanwhile, Wyevale Garden Centres owed £14,296.58 in back pay to two employees, averaging out to £7,148.29 each.
“These two isolated incidences involved two colleagues who live in accommodation within our garden centres. As their rent is paid via payroll, this technically reduced the hourly rate to below the national minimum wage level” a spokesperson for Wyevale stated.
“HMRC have confirmed that they are satisfied with our colleague pay structure but that a breach had technically occurred. As a responsible employer, we are committed to paying the NMW and have now made good the difference”.
The government’s naming and shaming scheme came into force in October 2013. The aim is to expose employers who have failed to pay their staff the national minimum wage and the national living wage rates. These organisations must then pay arrears of wages to affected staff members. Adding to this is the potential to face financial penalties of up to 200% of arrears, capped at £20,000 per employee, or prosecution in the most serious cases.
The government have announced the top five reasons for employers underpaying their employees, which are:
- Using the wrong time periods for pay calculations
- Employers taking deductions from wages for costs such as uniforms
- Employers failing to pay travel time/expenses
- Apprentices not being paid correctly
- Misuse of the accommodation offset
Since the scheme began in 2013, £10.8 million has been paid in pack pay to 90,000 employees. This has resulted in a total of 1,900 employers being fined up to £8.4 million. The government are set to spend £26.3 million between 2018 and 2019 on funding for minimum wage enforcement, which has more than doubled since 2015.
The minimum wage non-compliance lists are operating in alignment with a government campaign to raise awareness of the national living wage and national minimum wage rates. Both the National Minimum Wage and National Living Wage rates increased on 1st April 2018. The campaign began on the same day and has had 600,000 visits ever since on the website.
When asked of the campaign, Business minister Andrew Griffiths, said: “Our priority is making sure [employees] know their rights and are getting the pay they worked hard for. Employers who don’t do the right thing face fines as well as being hit with the bill for backpay”.
The Chairman of the Low Pay Commission Bryan Sanderson, said “It is crucial that employers understand their responsibilities and [employees] know their rights around the minimum wage. That is why active enforcement and effective communication from the government is so important”.
If you have any questions on the National Minimum Wage and National Living Wage, please contact a member of the HPC team:
T: 0844 800 5932