John Lewis heads ‘name and shame’ list for minimum wage failures

The Department for Business (BEIS) has released a list of 191 firms that it wanted to publicly call out for their failures in meeting minimum wage obligations

Fury has broken out over the “naming and shaming” of companies that fail to meet the UK’s minimum wage rules. The John Lewis Partnership (JLP) is understood to be furious after it has been identified as an offender.

The government signals that it will not back down in the face of complaints that the scheme calls out responsible corporate citizens for errors and should punish only deliberate criminal behaviour

The Department for Business (BEIS) has released a list of 191 firms that it wanted to publicly call out for their failures in meeting minimum wage obligations to their employees.

The list of companies, which also included Pret A Manger, as well as Sheffield United Football Club, were said to have been collectively short-changed over 34,000 workers by as much as £2.1m between the years of 2011 and 2018.

This come after UK bakery chain Greggs has said it expects to create 500 new jobs in the coming months as it is continuing to open new outlets in the nation. These new jobs come as part of the bakery chain‘s plans to open around 100 net new Greggs stores by the end of 2021.

BEIS said that all 191 firms had since been forced to pay back what they owed by HM Revenue and Customs and had fined an additional £3.2m for the breach.

The publication of the ‘name and shame’ lists is designed to act as a deterrent to the country’s rogue minimum wage business practices.

However, the “naming and shaming” scheme had been halted back in 2018 following a barrage of complaints, pending the outcome of a review into the scheme’s methodology.

It was resumed in 2020 following several changes to the scheme being made. They included a rise in the threshold for a firm to be publicly identified.

BEIS said that at the time, the review of the public naming scheme had ensured that “government calls out cases of abuse”.

But JLP had argued on Thursday that it had acted in the best interests of its workers, known as partners, over an issue dating back to 2017 that concerned difficulty in implementing new pay rules.

It publicly revealed at that time that it had set aside millions of pounds as a precaution and was working with the taxman to ensure backpay was swiftly delivered to those affected.

A total of £950,000 was paid back to partners.

A source close to the partnership suggested there was considerable anger over its inclusion on the list and called for the system to face a new overhaul.

A JLP spokesperson said: “We’re surprised and disappointed that BEIS has chosen to report this today.

“This was a technical breach that happened four years ago, has been fixed and which we ourselves made public at the time.

“The issue arose because the partnership smooths pay so that partners with variable pay get the same amount each month, helping them to budget.

“Our average minimum hourly pay has never been below the national minimum wage and is currently 15% above it.”

This comes after Britain’s economy has continued to rebound but it is now losing some of the earlier momentum in the face of certain inflationary pressures, new figures have indicated.

It has long been argued that the scheme calls out responsible corporate citizens for errors of interpretation and should punish only deliberate criminal behaviour.

Tesco, Britain’s largest retailer, was similarly upset when it was “named and shamed” last year.

The vast majority of the businesses on the latest list were small firms, including child nursery providers and hotels.

A Pret A Manger spokesperson said its inclusion, for an underpayment of almost £10,000, was down to a historic mistake over the interpretation of salary sacrifice for childcare vouchers – and it had quickly rectified the issue.

Sheffield United, which failed to pay £21,802.17 to 25 workers in 2018, said it had also taken quick action and reimbursed those affected as soon as it was made aware.

The government signalled it would not back down in the face of criticism of the system, arguing it was the responsibility of every employer to comply with the law.

It is understood that those behind the list felt John Lewis deserved its place there for a number of failures, including in relation to pay deductions for uniform.