Debenhams tops government’s shame list for underpaying staff
Retailers, restaurants and hotels among a record 360 firms named for shortchanging staff by almost £1m
Sarah Butler and Robert Booth Wednesday 15 February 2017 19.48 GMT
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers.
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers. Photograph: Ki Price/Reuters
The government has named and shamed a record 360 firms for underpaying their staff, with the list of offenders topped by Debenhams after nearly 12,000 of the department store’s workers were short-changed.
The businesses, including large numbers of hair salons, hotels, care homes and retailers, failed to pay either the national minimum wage or the national living wage to more than 15,500 workers, according to the list published by the Department for Business, Energy and Industrial Strategy.
The number of offenders surged as it includes the first group named for failing to pay the national living wage of £7.20 an hour for those over 25, which was introduced last year. The businesses were forced to pay back £995,233 to workers as well as penalties totalling £800,000 to HMRC.
Excuses for underpaying workers included using tips to top up pay, docking workers’ wages to pay for their Christmas party and making staff pay for their own uniforms out of their salary.
More than 1,000 firms have now been publicly shamed for underpaying their staff since the name and shame system was introduced in 2013. They have underpaid their staff by a total of more than £4.5m. Fines of more than £2m have been levied in addition to firms being forced to make good the wages owed.
Debenhams was named as the most prolific offender since the naming and shaming system came into force in 2013. The company was hit with a £63,000 fine and forced to pay back nearly £135,000 to nearly 12,000 workers. The company said it had underpaid staff by an average £10 each in 2015 because of a “technical error in its payroll calculations”.
A spokesman for the department store said: “As a responsible employer Debenhams is committed to the national minimum wage, and as soon as the error was identified by a routine HMRC audit last year we reimbursed all those affected. We have apologised to all our colleagues affected and have taken steps to ensure it cannot happen again.”
The error by Debenhams is embarrassing, but many businesses were found to have underpaid individual staff members by thousands of pounds.
Tasman Ltd, a Harley Street property company that lets space to doctors and dental practices, was the worst offender. It was found to have underpaid a housekeeper by more than £11,000 over a number of years.
Hospitality businesses, including restaurants and hotels, feature in the list most often for underpaying their staff, with 84 employers underpaying 563 workers in total.
Lorenzo Berni was found to have underpaid 29 workers by more than £53,000 at his upmarket Knightsbridge restaurant Osteria San Lorenzo. Only last year Berni’s Wimbledon eatery, which is a favourite haunt of tennis stars including Boris Becker, was forced to pay back almost £100,000 to 30 other employees. The company said the problem had occurred while it was dealing with family crises.
Contacted at his luxury Knightsbridge restaurant this week, Berni declined to comment. The restaurateur answered the phone but refused to respond and passed the phone to a colleague, who said only: “We have nothing to say.”
Those working in retail and the social care sector were next most likely to be underpaid.
Kate Ashley, a director of Pembrokeshire Care, a home care company in rural west Wales that underpaid 154 carers by £55,000, said the company had miscalculated the amount of travel time their employees should be paid to get to their mostly elderly clients
“We thought we were paying the right amount and the HMRC found that we weren’t,” she said. “We have put in place a new system of calculation that the HMRC has said it is happy with. The social care sector is under tremendous pressure and we are on tight margins, which are getting tighter all the time.”
The TUC general secretary, Frances O’Grady, called on the government to take tougher action on “serious offenders” who flouted the law, including prosecutions and higher fines.
“Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening,” O’Grady said.
The Unite union also called for tougher action against unscrupulous bosses of firms that underpay, including a new “wage theft” offence, as exists in the US, punishable with a jail sentence.
Unite’s assistant general secretary Steve Turner said naming and shaming was welcome, but bigger deterrents were needed. Turner said it was “pathetic” that only 13 businesses had been prosecuted for underpayment since 2007. “In America,” he said, “bad bosses are jailed and heavily fined for ‘wage theft’, which is what this is, exploiting workers in such a shameful fashion.”
The business minister Margot James said that by naming and shaming the government was “sending a clear message to employers that minimum wage abuses will not go unpunished”.
“Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it,” James said.