Tesco among more than 100 companies named and shamed for failing to pay minimum wage

Revelation comes as it is announced that supermarket chain’s former boss, who took home £6.42m this year, is in line for a knighthood. Colin Drury reports

(Reuters)

Tesco is among more than 100 companies which have been named and shamed by the government for failing to pay workers the minimum wage.

The supermarket giant was one of 139 employers on a list of firms which had short-changed staff.

In total, the companies failed to cough up £6.7m owed to some 95,000 employers between 2016 and 2018.

In a statement on Thursday, the Department for Business, Innovation and Skills called it “completely unacceptable breach of employment law” and said the list should be a wake-up call to rogue bosses.

Hotels, garages, hairdressers and shops were among the businesses found to have underpaid employees.

But the revelation that Tesco – the UK’s biggests private employer – was one of the offenders will be seen as hugely embarrassing following a year in which the supermarket has attempted to pitch itself as the nation’s grocer.

Its profits have soared during the coronavirus pandemic with the giant taking on 16,000 extra staff. So well has it done out of the crisis that, in October, it announced it would hand back £585m in business relief rates to the government. On Wednesday, its former boss Dave Lewis, who stood down in September, received a knighthood for his services to the food industry.

The supermarket responded to its inclusion in the “list of shame” by saying it was “disappointed and surprised”.

It said a technical issue in 2017 meant some pay packets “inadvertently” fell below the national minimum wage, and that all those affected had been reimbursed.

A spokesperson said: “We are very sorry this happened and proactively reported the issue to HMRC at the time. All our colleagues were reimbursed in full and we immediately changed our policies to prevent this happening again. In most cases the reimbursement was £10 or less.”

But minister for small business, Paul Scully, said: “Paying the minimum wage is not optional, it is the law. It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list.

“This should serve as a wake-up call to named employers and a reminder to every one of the importance of paying workers what they are legally entitled to.”

One of the main causes of minimum wage breaches was low-paid employees being made to cover work costs, such as paying for uniform, training or parking fees.

Some employers, meanwhile, failed to raise pay after employers had a birthday which should have moved them into a different bracket.