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John Lewis and Waitrose reserve £36m for payroll error

Supermarket staff on the minimum wage may be due their share of £36 million due to a recently discovered potential payroll error

The John Lewis Partnership, which operates 48 John Lewis shops and 354 Waitrose shops, practice  ‘pay averaging’, a payment plan which aims to ensure staff are paid a consistent amount every month. For example, some rotas may mean staff work more hours one month than other months – but pay averaging enables their staff to get a steady and reliable income each month. The issue lies in the suggestion that the Partnership believes this arrangement may not have met the “strict timing requirements” for paying the minimum wage.

The Partnership has reserved £36 million to “cover any payments that might become due, along with employers’ National Insurance, pension costs and other associated costs,” adding that it will make any retrospective payments required to both former and current colleagues.

However, they have stated that their contractual hourly rates of pay have “never” been below the minimum wage.

Sir Charlie Mayfield, chairman of the John Lewis Partnership says: “In our Annual Report and Accounts we have made a provision for any payment we may be required to make to comply with the National Minimum Wage Regulations (NMWR).

“In the Annual Report we have said that arrangements have already been made to make these payments and contact former Partners.

“HMRC is aware and we intend to work with it in order to resolve some of the key points regarding the way the NMW Regulations apply to our pay arrangements and practices. We expect to do this as quickly as possible. However, it is likely these discussions will take some time to be completed.”

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