Hundreds of businesses including high-street heavyweights WH Smith, M&S and Argos have been named and shamed after being fined for failing to pay workers the minimum wage.
Firms from sole traders to household names were ordered to repay 63,000 staff lost wages totalling close to £5m, after breaching National Minimum Wage (NMW) law.
WH Smith topped the list for failing to pay more than £1m to over 17,000 workers, closely followed by Lloyds Pharmacy, which had to repay over £900,000 to almost 8,000 of its staff.
Supermarket and clothing retailer M&S failed to pay more than 5,000 employees almost £580,000, while Argos, owned by Sainsbury’s, repaid over 10,000 workers over £480,000.
Bingo operator Buzz Group also failed to pay close to £320,000 to more than 3,000 staff.
Small business minister Kevin Hollinrake said: “Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.”
The 202 businesses were cumulatively fined almost a further £7m, payable to HMRC, in what ministers said was a “clear message from government that no employer is exempt”.
The Department for Business and International Trade (DBIT) and HMRC refused to tell City A.M. how many companies were also fined, and by how much.
WH Smiths, Lloyds, Argos, M&S and Buzz were also asked by City A.M. whether and how much they were fined.
39 per cent of firms docked employees’ pay while a separate 39 per cent failed to pay the right amount for work hours, and a further 21 per cent of employers paid the wrong apprenticeship rate.
It came after a 9.7 per cent rise in the statutory living wage and minimum wage came into force for nearly 3m workers across the UK in April 2023.
The repayments and fines followed HMRC investigations concluding between 2017 to 2019.
“We’re sending a clear message to the minority who ignore the law: pay your staff properly or you’ll face the consequences,” Hollinrake added.
Low Pay Commission chairman Bryan Sanderson said: “The minimum wage acts as a guarantee to ensure all workers without exception receive a decent standard of pay.
“Where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses.”
A spokesperson for WH Smith said: “Following a review with HMRC in 2019, it was brought to our attention that we had misinterpreted how statutory wage regulations applied to uniform policy for staff working in our stores.
“This was a genuine error and was rectified immediately with all colleagues reimbursed in 2019.”
A Sainsbury’s spokesperson said: “In 2018, a payroll error was identified which affected some Argos store colleagues and drivers, dating back to 2012, before Sainsbury’s acquisition of Argos.
“We launched an immediate investigation, alongside HMRC, and put this right at the time. Since then we have completed the integration of Argos onto Sainsbury’s systems which will prevent this from happening again.
“Since acquiring Argos, we have made significant investment into pay and the Argos hourly rate is now aligned with Sainsbury’s, an increase of 53 per cent over the last seven years.”
An M&S spokesperson said: “Like many other organisations, M&S is only named in the NMW list because of an unintentional technical issue from over four years ago.
“This happened simply because temporary colleagues were not paid within the strict time periods specified in the regulations and this was remedied as soon as we became aware of the issue. Our minimum hourly pay has never been below national minimum wage, and no colleagues were ever underpaid because of this.”
A spokesperson for Lloyds Pharmacy said: “Lloyds Pharmacy can confirm that this relates to a historical, and unintentional, underpayment brought about by HMRC’s rules around company uniforms.
“As soon as we were made aware of it we acted quickly to notify the affected colleagues and reimburse them. We also updated our uniform policy to ensure it did not recur.
“Lloyds Pharmacy can confirm all our employees are paid above the national minimum wage and would like to take this opportunity to apologise again to any Lloyds Pharmacy colleagues who were affected, as well as reassure them of our commitment to fair and equitable pay.”
A spokesperson from Buzz Bingo said: “We have always paid national minimum wage or above so when these matters came to light five years ago, we immediately took steps to revise our time recording technology and our staff uniform policies so the issues raised cannot be repeated.
“We would never intentionally short change our hard-working team, and we apologised in 2018 to all colleagues affected and immediately reimbursed them for any losses.”