John Lewis boss waives bonus as retailer shells out £36m for minimum wage abuse

 
Helen Cahill
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John Lewis is in talks with HMRC (Source: John Lewis)

The chairman of the John Lewis Partnership, Sir Charlie Mayfield, has waived his £66,000 bonus due to the low bonuses reserved for his employees this year.

Meanwhile, it emerged that the retailer has set aside £36m for back payments to staff following its abuse of national minimum wage regulations.

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In March John Lewis said it would give its employees, also known as partners, a six per cent bonus this year, down from a 10 per cent bonus the year before, citing the need to strengthen its balance sheet.

Today Mayfield said the decision required the "commitment of every single partner", and that he wanted to show his solidarity with staff by setting aside his own bonus. This means his pay fell 7.4 per cent year-on-year to £1.41m.

John Lewis is now in talks with HM Revenue and Customs (HMRC) over pay because the business has not been complying with national minimum wage regulations, an oversight it has estimated will cost the firm £36m.

Read more: John Lewis is making another round of job cuts

Non-management staff at Waitrose and John Lewis earn an average of £8.90 per hour, and the business insists hourly rates have never been below the national minimum wage.

However, John Lewis uses pay averaging to ensure staff receive the same take-home pay every month. This means that if staff work more hours in one month, they may take home less than the amount stipulated by HMRC.

John Lewis said it doesn't know how many staff have been affected, but that the £36m is to cover wage payments stretching back six years.

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