H&M, Welcome Break and Kings Group fail to pay minimum wage

H&M, Kings Group and Welcome Break are among 37 employers that failed to pay some employees the national minimum wage, according to business minister Jo Swinson.

H&M-store front-2015

Between them, the 37 named employers owe their workers over £177,000 in arrears and have been charged financial penalties totaling over £51,000.

The government has already named 55 employers since the new naming regime came into force in October 2013. They had total arrears of over £139,000 and total penalties of over £60,000.

HM Revenue and Customs’ (HMRC) national minimum wage enforcement budget will be increased by a further £3 million in 2015/16, taking the total to £12.2 million.

This extra money will go towards increasing the number of HMRC compliance officers to identify businesses that pay employees below the national minimum wage.

Swinson said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable.

“If employers break this law, they need to know that we will take tough action by naming and fining them up to £20,000, as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.

“We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker, rather than per employer.”

“We are also looking at what more we can do to make sure workers are paid fairly in the first place.”

A Kings Group spokesperson said: “Kings Group has always paid its sales staff a basic weekly wage plus commission.  This structure, which is very common in the estate agency and lettings sectors, has enabled its staff to earn extremely good salaries on an annual basis. 

“When the national minimum wage regulations were introduced, it became necessary to ensure that each four-week period was looked at separately, with no account being taken of the fact that the employee may have been paid substantial sums in other four-week periods.   

“When this was brought to Kings Group’s attention by HMRC, it checked its records and ensured that full payment was made to every individual concerned, for those periods where payment had fallen short. 

“[It has] also now adjusted its payment practices to spread payments more evenly between each four-week period and to ensure that its now strictly complies with the regulations.”

Rod McKie, chief executive officer of Welcome Break, said: “Our initial breach was brought to light as an employee complained to HMRC that her pay rate had not been increased correctly upon reaching her 21st birthday, thus putting us in breach of the new national minimum wage regulations. We worked closely with HMRC during its investigation and following a thorough internal review, it transpired that of our 4,500 employees, there were 19 further people in a similar position.

”We are grateful for having had this brought to our attention, it was rectified immediately and the affected staff paid accordingly. We undertook a review of processes and are confident that our systems and controls are now strong, effective and compliant with applicable regulations. A number of additional procedures have been implemented to ensure that pay rates are correct for all employees in the future.

”In this instance, we clearly fell short of the high standards we consistently strive to deliver. However, we are pleased that this matter has now been fully resolved with HMRC and is now closed.”

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H&M declined to comment.