Pret, McColls and Welcome Break in minimum wage failon August 4, 2021 at 11:59 pm

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Retailers and 190 other businesses broke the law by underpaying workers, the government says.

A woman working in a cafe

image sourceGetty Images

Pret, McColls and Welcome Break are among almost 200 firms “named and shamed” by the government for not paying workers the minimum wage.

In total, 191 companies investigated between 2011 and 2018 failed to pay £2.1m to more than 34,000 workers.

The businesses were made to pay back the money as well as being fined £3.2m.

Pret, McColls and Welcome Break said the underpayments were historic errors and staff had been swiftly reimbursed.

Nearly half of the breaches involved firms deducting pay from wages, for things like uniforms and expenses. Others failed to pay for all the time staff worked or paid the incorrect apprenticeship rate.

Other organisations named by the government included Sheffield United and four other football clubs, as well as the Body Shop chain, Worcestershire Cricket Club and Enterprise Rent A Car.

Retail giant John Lewis was also named over an underpayment reported four years ago.

The National Living Wage, as it is now known, is currently £8.91 an hour for workers over the age of 23.

The government acknowledged that many of the breaches were not intentional, but said the minimum wage laws were meant to ensure that a fair day’s work received a fair day’s pay.

“It is unacceptable for any company to come up short. All employers, including those on this list, need to pay workers properly,” said business minister Paul Scully.

“This government will continue to protect workers’ rights vigilantly, and employers that short-change workers won’t get off lightly,” he added.

Low Pay Commission chairman Bryan Sanderson said: “These are very difficult times for all workers, particularly those on low pay who are often undertaking critical tasks in a variety of key sectors including care.

“The minimum wage provides a crucial level of support and compliance is essential for the benefit of both the recipients and our society as a whole.”

Pret a Manger said the underpayment refers to a 2019 case that affected 33 employees, and that it had since made the required payments to staff and HMRC.

The team members had opted to use some of their salary in exchange for childcare vouchers.

Those deductions reduced the National Minimum Wage eligible pay, a spokesperson said, adding that the government has since changed those rules.

A Welcome Break spokesperson said: “In 2018, HRMC informed us, along with many other businesses, that our policy on team member uniforms inadvertently led to a breach of the National Minimum Wage.

“As soon as we were made aware of this oversight, we fully reimbursed and apologised to all affected team members.

“We never intended to underpay our employees and have strengthened our policies and training to prevent this from happening again.”

A spokesperson for Enterprise Holdings said during an audit in 2017 HMRC noticed that we had mistakenly underpaid two apprentices over a two-year period.

Further investigation by the firm showed that 62 employees had also fallen below the minimum wage between 2012 and 2018, and they were reimbursed.

“Although these historic underpayments represent less than 1% of Enterprise’s employees during the period, it is something that we take very seriously,” a spokesperson said.

McColl’s said the problem related to staff attendance recording processes and it had reimbursed those affected.

In all, 2,300 employers have been named since the current scheme was introduced in 2014.

Trades Union Congress head of economics, Kate Bell, said these cases “are likely to be just the tip of an underpayment iceberg”.

“Minimum wage workers have been at the heart of the pandemic, and deserve a decent wage of at least £10 an hour.

“But these figures show many workers aren’t even being paid the legal minimum, with household name employers flouting their responsibility to properly pay staff.

“Government should step up inspections to catch every employer that underpays staff.”

She added that workers who suspected they were being underpaid should discuss that with their union rep.

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