14 Dec 2017
The Government has publicly named and shamed 260 businesses for paying their employees below the minimum wage.Two of the most high profile businesses on the list were Primark and Sports Direct, which have been ordered to pay thousands of pounds back to staff. The retailers had to repay the most of 260 firms named on the government's list for paying their staff below the legal minimum. Primark had to repay £231,973.12 mainly due to charging staff for uniforms. Sports Direct, and two staff agencies it used, had to pay back a total of £1.1m to their workers. All firms said the issues were now rectified.
Expert Opinion2017 has been a year which has highlighted significant issues with pay in the press, with high profile employers being identified by the Department for Business, Energy & Industrial Strategy (BEIS) as not paying their employees fairly. Although the scheme states this list will be published twice yearly the BEIS has released the third list for 2017 highlighting that their seems to be a real issue with employers struggling to pay minimum wage rates. Some employers, particularly in the hospitality and retail sectors are already struggling to increase salaries enough to account for the additional deductions, which they must provide to employees too.
Employer Fines Set To GrowWith the minimum wage rates set to increase by a further 3% in April 2018 this list could potentially get even bigger. Inflation rates dipped slightly in October 2017 to 2.8% from 3% in September, however data collected by Croner Reward shows that the average pay settlement for October 2017 was 2.1% and we are forecasting that this will rise by 2.5% in April 2018, 0.5% less than the increase for minimum wage rates. This highlights that while employers are trying to match inflation rates they just can’t quite get there at the moment. It also suggests that those companies paying minimum wage rates could be applying different percentage increases for different roles within the organisation which could be seen as unfair especially for those employees that don’t receive the 3% increase their colleagues do.
How To Get Pay & Benefits RightEmployers need to be proactive and start to review their pay structures now. By investing in this early it means they will have a pay structure in place that can support them over the coming years and can avoid the significant fines they may be at risk of receiving.
We’re Here To HelpCroner Reward is one of the most accurate and knowledgeable benchmarking resources in the UK, Which employers can utilise to set their pay and benefits packages to help ensure you meet current legislation. For more information on our expert pay and benefits services call 0808 145 3490 .
Do you have any questions?
Get a free callback from one of our regional experts today