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Companies still failing to pay their staff the minimum wage

Companies are still committing the criminal offence of paying below the minimum wage

Despite numerous warnings and high-publicity cases in recent years, companies are still committing the criminal offence of paying below the minimum wage. The maximum fine that firms have to fork out is 200 per cent of each penny underpaid; furthermore, companies that are found to have breached the law must pay staff the cash to which they are rightly entitled.

Earlier this year, a total of 179 companies underpaid 9,200 workers around £1.1m. The staff received the lost earnings in back pay and the firms were fined a total of £1.3m. Sports Direct and its employment agencies Best Connection and Transline were amongst those named and shamed by the government for paying less than the minimum wage, with the amount paid falling short by nearly £1m.

A list published by the Department for Business, Energy and Industrial Strategy named a total of 260 firms that withheld money from a record 16,000 people – this figure totalled £1.7m. Primark was third on the list, failing to pay 9,735 workers around £230,000. Also among those named and shamed by the government for failing to pay workers the correct wage were high street chains Wagamama and TGI Friday’s and hotel brand Marriott.

Following a series of high-profile failures, ministers are set to impose stiffer penalties on firms that fail to pay their staff the minimum wage. It came to light that the government imposed a penalty of just £14m on companies during a year in which staff were underpaid by some £15.6m.

The working population is facing a slower rate of pay growth since the economic crisis and the high inflation after the vote to leave the EU two years ago. Around two million people throughout Britain receive the national minimum wage, which is set at £7.83 per hour for those aged over 25.

The failure to receive the minimum wage can also affect those who are self-employed. New analysis published by the TUC revealed that half of self-employed people aged 25 and over are earning less than the minimum wage – around two million people. Self-employment has risen dramatically in recent years, from around 12 per cent of workers in 2001 to roughly 15 per cent in 2018.

Those who are self-employed often earn much less than those in staff roles. In 2016/17, the self- employed in the workforce made on average £12,300; for those in employment, the figure was £21,600 – almost double.

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