Connect with us

Benefits

Greggs, Estee Lauder and EasyJet named and shamed for minimum wage breach

Published

on

Greggs, Estee Lauder and EasyJet are among 524 business that failed to pay their employees minimum wage between 2015 and 2023.

The businesses, named by The Department for Business and Trade (DBT) on Tuesday (20 February), underpaid workers a total of nearly £16 million.

They were ordered by the DBT to repay this in full, along with up to 200% of their underpayment in financial penalties.

Kevin Hollinrake, minister for enterprise, markets and small business, explained that employees deserve to get paid properly.

He said: “While the majority of businesses already do the right thing and pay their staff what they are owed, [Tuesday]’s announcement sends a message to the minority who aren’t – that there are repercussions to undercutting hard work from their staff.”

Jason Davenport, CEO of the Chartered Institute of Payroll Professionals (CIPP), told HR magazine that the main reasons for the breaches were pay reductions or deductions (183 employers); unpaid working time (160 employers); or failure to pay the correct rate to apprentices (82 employers).

He noted that complex national minimum wage (NMW) legislation could account for the breaches.


Read more: National Living Wage to hit £11: what HR needs to do now


He said: “Payroll professionals’ main objective is to pay employees accurately and on time, every time, and the CIPP believes NMW breaches would not be made intentionally.

“What the naming list does show is that complex legislation can be misunderstood, even by professionals processing NMW on a daily basis.”

Estee Lauder Cosmetics Group had the third biggest underpayment of £894,980.43 to 5,933 workers.

A spokesperson for Estee Lauder said that its underpayments were due to uniform policies.

The spokesperson said: “In 2019, like many other companies, we were made aware that we had misinterpreted guidance from HM Revenue and Customs on the way in which payment was taken for voluntary staff purchases of our concession products and on staff clothing requirements.

“We immediately made sure all affected employees were informed and reimbursed and updated our procedures.”

Mitchells and Butlers had the fifth biggest underpayment of £565,094.87 to 16,187 workers.

A spokesperson for Mitchells and Butlers told HR magazine that these were due to a technical misinterpretation of the legislation.

The spokesperson said: Our minimum hourly pay has never been below the national minimum wage.

“As the minister notes, not all underpayments are intentional. This was the case here.

“The HMRC review of our pay practices, which concluded in 2019, identified a technical misinterpretation of the regulations.

“All arrears due were paid to our valued employees and ex-employees at the end of the review, and we have updated our policies where necessary.”

EasyJet Airline Company, which was eighth on the list, identified during a 2018 review that mispayments had been made to some cabin crew members in their one-month training period.


Read more: Minimum wage will rise by almost 10%


A spokesperson for EasyJet said: “This was a genuine error which we immediately rectified and issued back payments to all affected crew.

“While all crew in this period (2014-2019) were paid in line with the national minimum wage for their total annual salary, this review in 2018 identified a specific issue affecting our new entrant cabin crew only during their initial three week training course, as some payments only apply once crew are flying.

“EasyJet is committed to treating its people fairly, paying competitively and complying with market practices.”

The national living wage and national minimum wage is set to increase by 9.8% to £11.44 an hour on 1 April 2024.

Davenport continued that employers should stay ahead of changing legislation, as well as the rules and rates impacting the payroll industry, to remain compliant.

He added: “Members of the CIPP receive a legislative tax year update every year, which specifically covers what rates of national minimum wage to pay to workers.

“Training courses and qualifications up-skilling knowledge is imperative to professionals working within the payroll industry.

“Payroll plays a pivotal part in people’s livelihoods, and the CIPP is here to ensure that payroll professionals remain compliant.”

 

The 10 employers with the biggest underpayments were: 

  1. Staffline Recruitment – underpaid £5,125,270.93 to 36,767 workers
  2. Rank Group Gaming Division – underpaid £962,504.92 to 5,629 workers
  3. Estee Lauder Cosmetics – underpaid £894,980.43 to 5,933 workers
  4. Pilgrim’s Pride – underpaid £597,299.65 to 2,698 workers
  5. Mitchells and Butlers – underpaid £565,094.87 to 16,187 workers
  6. Kane Foods – underpaid £562,614.36 to 1,109 workers
  7. Tuffnells Parcels Express – underpaid £340,784.57 to 576 workers
  8. Easyjet Airline Company – underpaid £338,876.46 to 3,898 workers
  9. GR and MM Blackledge – underpaid £324,742.87 to 1,541 workers
  10. Elis UK – underpaid £257,265.44 to 1,801 workers

Read the full article here

Trending