UK’s Largest Retailers Hit with £7 million Fines for not Paying Minimum Wage

Amongst the 202 employers listed were several household names, including the following:

• WH Smith Retail Holdings Limited, who failed to pay £1,017,693.36 to 17,607 workers;
• Lloyds Pharmacy Limited, who failed to pay £903,307.47 to 7,916 workers;
• Marks and Spencer P.L.C., who failed to pay £578,390.79 to 5,363 workers; and
• Argos Limited, who failed to pay £480,093.58 to 10,399 workers.

Read the full DBT list of companies to see all the employers named for NMW underpayment.

The breaches in the list occurred between 2013 and 2019, with HMRC concluding its investigations between 2017 and 2019.

The employers named are understood to have underpaid their workers in the following ways:

• 39% of employers deducted pay from workers’ wages. WH Smith, who topped the list, attributed this failure to its uniform policy, where it failed to provide black trousers or skirts and shoes to its employees, resulting in a shortfall in wages.
• 39% of employers failed to pay workers correctly for their working time.
• 21% of employers paid the incorrect apprenticeship rate.

Marks and Spencer attributed its inclusion on the list to an “unintentional technical issue from over four years ago”.

The giant claimed that temporary staff were not paid within the required periods, and the error was rectified as soon as the company became aware.

WH Smith said its underpayments were caused by misinterpreting how minimum wage rules applied to its staff uniform policy; an issue said to have been faced by other employers such as Lloyds Pharmacy.

Argos, the owner of Sainsbury’s, defended the latter’s inclusion on the DBT list by explaining that its underpayments of wages related to an error discovered in 2018, dated back to 2012, before its acquisition of the business.

The publishing of this list serves as a stark reminder of the consequences for employers who fail to pay their staff properly and in accordance with the law.

In addition to reputational damage, those exposed on the list have been ordered to repay their workers and face penalties amounting to nearly £7 million following the breaches.