Retail giant Argos faces a £1.5m fine after it was revealed yesterday (February 16) that 37,000 of its current and former workers have been illegally denied the minimum wage.
The revelation means that Argos must fork over £2.4m in back pay to shop staff, who were underpaid because they were forced to attend meetings and go through security checks during working hours, time for which they were not paid.
Argos, which is now owned by Sainsbury’s, will not be forced to pay the entire £1.5m HMRC fine – it is set to receive a discount if the fine is paid within 14 days, which will bring the fine down to £800,000.
The back pay owed to Argos workers exceeds the amount owed to Sports Direct workers, who received £1m after they were underpaid the minimum wage for similar reasons last year.
The number of businesses ‘named and shamed’ by the government for illegally paying workers below the minimum wage reached a record high of more 350 on Wednesday (February 15).
The 359 companies on the list – the majority of which are in the hairdressing, hospitality and retail business – underpaid more than 15,000 workers by nearly £1m.
Before news broke that Argos, which was not included in the initial government list, retailer and household name Debenhams was the most prolific offender paying below the minimum wage. It was forced to repay £134,000 to more than 11,000 staff – which accounted for more than half of its shop workers.
The retailer said that an accounting error was to blame – and was slapped with a £63,000 fine.
Other offenders had higher back pay bills for single workers – for example, a dental practice in London’s Harley Street owed one worker nearly £12,000, while another worker at a nursery in Nottingham was owed nearly £7,000.
Last month, the government also released a list of what it called the most ‘bizarre’ excuses they received from bosses for not paying the minimum wage.
These included “she only makes tea”, “I only pay them when customers are in the shop” and “they aren’t British so don’t have the right to be paid it”, among others.
TUC general secretary Frances O’Grady said that the news “should be a wake-up call for employers who value their reputation.”
“If you cheat your staff out of the minimum wage you will be named and shamed,” she added.
“But we also need to see prosecutions and higher fines for the most serious offenders, especially those who deliberately flout the law.
“Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening.”
Unite assistant general secretary Steve Turner agreed.
“The government needs to crack down further on employers who failed to pay the national minimum wage to some of the most low-paid and vulnerable workers in the country,” he said.
“The fact that the government has mounted only 13 prosecutions for non-compliance since 2007 is pathetic,” he added. “In America, bad bosses are jailed and heavily fined for ‘wage theft’ which is what this is, exploiting workers in such a shameful fashion.
“The fact that an established household name like Debenhams is on the list is appalling. This is a major retailer with a large HR department – how could such non-payment be overlooked for so long?
“If top executives with mega pay packets weren’t getting their bonuses paid on time, all hell would break loose,” he went on to say.
Turner welcomed the government’s ‘name and shame’ list but highlighted that it was “only a small step in the right direction and much more is needed.
“To address growing levels of poverty a genuine living wage must be introduced, sector level collective bargaining introduced and stronger more effective enforcement funded,” he said.
“This would mean proper resources for the agencies responsible for enforcement and the cuts they have suffered in recent years to be reversed.”
Turner also noted that Unite believes the government’s national minimum wage, currently £7.20 an hour, is “inadequate and pathetically low” and added that it is “leading to obscene levels of growing poverty in our communities.
“Unite strongly support a minimum living wage of £10 an hour.”