H&M, the world’s largest fashion retailer, is in hot water after it was today named and shamed by the Government for not paying at least the minimum wage to hundreds of its UK workers.
The Swedish company is one of 37 caught and fined by HM Revenue & Customs for breaking the law by failing to pay workers, who were owed a total of more than £177,000.
At H&M, 540 workers were underpaid by £2,605 in total, although the company insisted this was due to a computer error and all staff have since been reimbursed.
The Government is attempting to crack down on businesses who fail to pay a minimum of £6.50 an hour to any staff aged over 21.
It comes as ministers revealed the budget for investigating rogue employers will increase by £3m to £12.2m next year.
Jo Swinson, the Business minister, said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable. If employers break this law they need to know that we will take tough action by naming, shaming and fining them, as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.”
However, there has been some criticism that the levels of fines dished out to errant companies is too low, with this latest spate of businesses fined just £1,400 each. By comparison, H&M’s profits last year were more than £600m in the last quarter alone.
The Government is hoping to change this and is pushing through the Small Business Bill, which will increase the level of fines to up to £20,000 and will be based on the number of employees underpaid rather than per infringement uncovered.
It means that if H&M had been caught once the new legislation passes later this year, it could in theory have been fined as much as £10.8m.
Retailers and the leisure industry, such as pubs, restaurants and coffee shops, have been urged by politicians and campaigners in recent years to improve pay and contracts for staff, calling on them to scrap controversial zero hours contracts and adopt the living wage of £7.85 an hour, or £9.15 in London.
Campaigners have flooded retailers including John Lewis and Marks & Spencer with emails encouraging bosses to pay the living wage, but so far the only retailer to have signed up is soap-maker Lush. The Small Business Bill will also target zero-hour contracts.
A spokesperson for H&M said: “H&M employs more than 9,500 people in the United Kingdom. Unfortunately due to errors within some of our stores concerning time-logging, 540 employees were accidentally underpaid the national minimum wage.