Debenhams among UK firms named for underpaying staff after payroll error

By

Barbara Santamaria

Published
Feb 16, 2017

British retailers Debenhams and Peacocks are among nearly 360 employers named by the Department for Business, Energy & Industrial Strategy for failing to pay their workers the national minimum or living wage.

The 359 businesses underpaid 15,513 workers a total of £994,685, and the list includes offenders from all sectors including hairdressing, hospitality, retail and childcare.

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.

Department stores chain Debenhams was named as the worst offender in the Government list in trems of numbers underpaid and the total value. That was after almost 12,000 workers were paid nearly £135,000 less than they should have been. However, the amount per worker was small and it appears not to have been part of a deliberate policy. The company said it had experienced a “technical error in its payroll calculations”. This led to staff being underpaid by an average of £10 each in 2015.

“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,” said a spokesperson.

Debenhams’ error was small compared with other UK firms, which failed to pay individual staff workers by thousands of pounds in the period. Tasman Limited underpaid an employee by £11,800, while Mrs Elizabeth Purkis trading as The Buttonhole failed to pay nearly £10,000 to one worker.

Cardiff-based fashion retail chain Peacocks was also named for underpaying its staff. The retailer, which employs over 6,000 people, failed to pay £2,256 to 42 workers.

Business Minister Margot James said she wanted to send a clear message to employers that “minimum wage abuses will not go unpunished”. As well as recovering arrears for some of the UK’s lowest paid workers, HMRC issued penalties worth around £800,000.

The current National Living Wage is set to increase from £7.20 to £7.50 per hour on 1 April for those aged 25 and over, while the adult rate of National Minimum Wage will increase from £6.95 to £7.05 per hour for 21 to 24-year-olds.