Small-business owners are under constant pressure to lower costs. However, they’d be ill-advised to do so by trying to cut corners around employees’ salaries. Not only would they risk breaking the law and be forced to dosh out both back pay and fines but could also be publically named and shamed by the government. Over 230 businesses were reminded of this last night when the Department for Business, Energy and Industrial Strategy released a list of companies that had failed to pay workers both the national living wage and the minimum wage.
Having been revealed to have underpaid their staff, the 233 organisations on the list were told to pay back a total £2m to their employees and an additional £1.9m in fines. Topping the list of offenders was the retail chain Argos, which had failed to pay over £1.4m to 12,176 workers. Pearson Anderson, the recruitment franchise, was the second most prolific under-payer, having neglected to remunerate 169 employees to the tune of £49,800.
According to the full list, businesses in the retail, hairdressing and hospitality sectors seemed more prone than others to underpay their staff. Common errors made by employers included deducting money from pay packets to pay for uniforms, failure to account for overtime hours and wrongly paying apprentice rates to workers.
This was the 12th time that the government has published a list of businesses underpaying their workers. The scheme first came into force in 2013 in order to tackle the issue of unlawfully low salaries. According to the law, any employer failing to pay minimum wage will not only have to pay back wages to the worker at current minimum wage rates but could also face financial penalties of up to 200% of arrears, capped at £20,000 per worker. In the most serious cases, employers can be prosecuted.
Commenting on the list, Margot James, the business minister, said: “It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers. Today’s naming round identifies a record £2m of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.”
So tempting as it might be to scrimp on salaries, this list showed that doing so could be costly both for your brand and for your bottom line. 
