Primark and Sports Direct have been ‘named and shamed’ by the Government for failing to pay the minimum wage to thousands of workers.
The retailers came in at the top of the 260 firms named on the government’s list for paying their staff below the legal minimum.
Despite the government’s apparent success in cracking down on pay, it is thought that hundreds of thousands of workers are still not getting their legal entitlement
All firms said the issues were now rectified.
Primark was listed as the third-biggest offender mainly due to charging staff for uniforms, resulting in them earning less than the minimum wage. Primark was forced to pay back £231,973.21 to 9,735 employees.
A spokesperson for Primark, which is owned by Associated British Foods, said its uniform policy changed last year and that it “had reviewed its procedures in order to avoid this situation re-occurring.”
“The company is committed to the National Minimum Wage and has apologised to the employees concerned. It has also reviewed its procedures in order to avoid this situation re-occurring.”
The fashion retailer said that following an audit from HMRC it had identified the error and the average amount paid per employee was £23.75.
Primark said a small proportion of the underpayment also related to administration costs levied on pay packets linked to a duty to deduct money which the courts had ruled some employees owed, such as child maintenance.
An investigation by HMRC last June found that workers at the retailer’s main distribution centre in Derbyshire were being paid less than the minimum wage because of the retailer’s lengthy search processes
Some employees had also been docked a quarter of an hour’s pay if they clocked on one minute late.
This meant that some workers’ pay fell below the minimum wage, or the National Living Wage for those aged over 25.
Mr Ashley admitted to MPs that staff had been underpaid, and since then the company has attempted to overhaul its work practices, such as reducing the amount of searches, offering guaranteed hours and scrapping a “six strikes” policy.
Overall, the Department for Business, Energy and Industrial Strategy (Beis) who published the report said 16,000 workers had not received at least the minimum wage.
It said this was the highest number of employees affected since it first published the list in 2013.
Business Minister Margot James said:
“There is no excuse for not paying staff the wages they’re entitled to and the government will come down hard on businesses that break the rules.
“That’s why today we are naming hundreds of employers who have been short changing their workers; and to ensure there are consequences for their wallets as well as their reputation, we’ve levied millions in back pay and fines.”