Argos has topped the list of companies failing to pay their workers the minimum wage, owing nearly £1.5m in back pay to 12,000 workers, as the government last night (August 16) released its latest ‘name and shame’ list of underpaying employers.
The list includes more than 200 businesses owing about £2m to more than 13,000 employees. The government has also fined companies a record £1.9m.
Of the companies on the list, those that were the most prolific offenders were companies in retail, hairdressing and the hospitality industries.
While Argos was by far the largest company on the list of companies illegally paying below the minimum wage, owing each of the thousands of underpaid employees about £64, other smaller businesses owed fewer workers large payments.
For example, a Chinese takeaway in Northern Ireland, Vongs Hot Food Bar, owed one worker nearly £20,000.
Common errors employers made as they underpaid their workers included incorrectly paying the apprentice rate – which is much lower than the adult minimum wage rate of £7.50 an hour – deducting money from employees’ pay packets to pay for their uniforms, and failure to properly include overtime hours.
Race to the bottom
Argos fell afoul of minimum wage laws when workers were called into morning meetings before their shifts and kept after work to undergo security searches – time for which they were not paid.
Argos being forced to pay their workers back pay comes as the retailer, owned by Sainsbury’s, is embroiled in a dispute with Unite at its distribution centres. Striking members are asking that they be given guarantees over the safeguarding of their terms and conditions.
They began a three-week strike on Tuesday (August 15) over the failure of the company to negotiate a national agreement covering redundancy and severance packages.
Unite believes that Argos’ underpayment of retail workers and its treatment of workers at distribution centres is inextricably linked – both involve a race to the bottom for workers’ pay, terms and conditions.
Unite national officer Matt Draper appeared on BBC’s The One Show last night (August 16), commenting on Argos failure to pay their workers the minimum wage.
“It disgusts me when I find out that there’s been a failure by a large company to pay the minimum wage,” he said. “Yet they never fail to pay the CEO and the main directors their astronomical wages.
“Whilst the minimum wage is not being paid, there are people living on the breadline,” he added. “Let’s be realistic — the minimum wage is set for a reason.”
Unite assistant general secretary Steve Turner argued that more must be done to ensure that bosses pay the minimum wage.
“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.
“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 such a large company like Argos is on the list is appalling,” he added. “Sainsbury’s, the retailer’s owner, is a major company with a large HR department – how could this possibly have been allowed to happen?”
Turner agreed with Draper that underpayment never happens for those at the high end of the pay hierarchy at any company.
“If top executives with mega pay packets weren’t getting their bonuses paid on time, all hell would break loose,” he said.
Turner believes that the government’s ‘name and shame’ list can be helpful 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 £7.50 an hour, is “inadequate and pathetically low” and added that it is “leading to obscene levels of growing poverty in our communities.
“Unite strongly supports a minimum living wage of at least £10 an hour.”