"A mistake is no defence when it comes to naming and shaming," says Lupton Fawcett employment director

by Louise Connacher, director specialising in employment law at Lupton Fawcett Denison Till

The National Minimum Wage is in the headlines once again, this time with an admission by Sports Direct that it has been underpaying workers at its Derbyshire warehouse.

The Guardian reports that, following the Guardian’s undercover investigation, Sports Direct has agreed to repay approximately £1 million to workers who were made to undergo compulsory searches at the end of each shift after they had clocked out. They were also docked 15 minutes’ pay if they were only one minute late clocking onto their shift.

This follows hot on the heels of the latest “naming and shaming” by HMRC, in which 198 companies were named as having failed to pay the National Minimum Wage. Of these, 17 Yorkshire companies owed over £40,000 in underpayments to their workers. The list of culprits shows that the hotel and hospitality industry, hairdressing salons, day nurseries and care homes are amongst the worst offenders.

It was reported last month that parcel delivery company Hermes was paying some couriers below the National Living Wage. Hermes’ response to the allegations was that the couriers are self-employed and that they enjoy the flexibility of being able to fit deliveries around personal circumstances, providing opportunities for retired people, parents and others who wish to work flexibly.

Meanwhile, Uber is currently fighting an employment tribunal claim from two of its drivers, backed by the GMB union, in which the drivers are arguing that they are employed rather than self-employed. The drivers are complaining that they are not given full employment rights, including the National Living Wage, holiday pay and sick pay.

It is becoming increasingly easy for workers to raise complaints without the expense of going to Employment Tribunal. HMRC has confirmed that it follows up complaints made by workers via the free ACAS helpline. Workers can also now use a free online form to report breaches of the National Minimum Wage.LFDT logo

HMRC uses this information to target employers, carrying out in-depth investigations and “naming and shaming” employers who are found to have breached the rules. Often, it is the impact on an employer’s reputation – rather than the back-pay due – which is of greatest concern.

Whilst some employers are exploiting their workers, others may have made mistakes in genuinely attempting to comply with a complicated area of legislation.

However, mistake is no defence when it comes to naming and shaming. Employers who are paying at or near the National Minimum Wage would be well advised to audit their processes and ensure that they are complying with this difficult area of law.

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