260 employers, including Primark and Sports Direct, have been named and shamed by the UK government for paying staff below the national minimum wage. Publicising cases in this way is part of the Governments wider strategy to crack down on companies breaking the law, and to dissuade others from following suit.
The listed employers have been ordered to pay £1.3million in fines, and have paid £1.7million to the 16,000 workers that have been affected. These cases go to show the serious penalties that businesses can anticipate by failing to comply with laws surrounding pay entitlements.
Primark have reimbursed staff to the tune of £231,973.12, mainly due to charging staff for uniforms. They are now in the process of reviewing their procedures to prevent this happening again. Among them was also Motherwell Football Club, who stated the reasons for their underpaying of staff was due to an “administrative error” by the club.
Despite all firms stating that they have now rectified their issues, there is another significant damage that would have impacted them, aside from financial costs. That is of course costs to reputation. Companies that have their reputation tarnished through providing inadequate working standards often struggle to recover, and this can often be done by overlooking some of the most basic policies in their employment contracts.
With the 2017 Autumn budget revealing that minimum wage is set to rise for over 25’s from £7.50ph to £7.83ph in April next year, there is even more call for employers to re-evaluate their pay structures.
According to BBC reports, the most common reasons for underpaying of staff was failure to pay travel expenses, deducting pay for uniforms and not acknowledging overtime.
At Fraser Brown Solicitors, we believe it is essential that employers seek professional legal advice when it comes to employment law. Contracts specifically tailored to your workforce can help safe guard your organisation, in the event that a claim is brought against you.
If you’re interested in any of the topics raised in this article, or for further information about how our employment law services can help you, please contact firstname.lastname@example.org, or call us on 0115 9888 777.