Sports Direct and Primark named and shamed for underpaying staff

Sports Direct and Primark are among a list of companies that have been named and shamed for paying staff less than the minimum wage, with the government dishing out £1.3m of fines and ordering £1.7m to be paid to 16,000 underpaid workers.

Fines were imposed on 260 firms for cheating the National Minimum Wage and National Living Wage rates, the Department of Business, Energy and Industrial strategy said on Friday.

The most prolific sectors for underpayment were retail, hospitality and hairdressing, while two of the best known offenders were Primark, an arm of Associated British Foods that failed to pay a total of almost £232,000 to 9,735 workers, and Sports Direct, which along with its employment agencies underpaid underpaid 4,362 staff by a total of £0.95m.

Among directly employed Sports Direct staff, 383 workers were underpaid more than £167,000 in total, while The Best Connection, the employment agency that supplies workers to the retailer's Shirebrook warehouse, was the worst offender in this round of naming-and-shaming, with second worst being agency Transline, Sports Direct's previous agency that has since gone bust.

Sports Direct has found itself in hot water over staff pay before, with the row over zero-hours contracts leading boss Mike Ashley two years ago to promise to pay directly employed staff and casual workers above the National Minimum Wage from 1 January 2016.

“I realise this is ambitious and it won’t be easy, but I believe as a FTSE 100 or even 250 company we have a responsibility to set a high moral standard," Ashley said at the time. “We’re putting our money where our mouth is and have notified the City we will be spending £10m ensuring all employees are above the minimum wage.”

Some of the reasons revealed by the government for payment errors included failing to pay workers travelling between jobs, deducting money from pay uniforms and failing to pay for overtime work. Minimum wage rates will rise again in April 2018, giving younger workers in particular the biggest pay boost in a decade.

REPUTATIONS ON THE LINE

Business Minister Margot James said: "There is no excuse for not paying staff the wages they're entitled to and the government will come down hard on businesses that break the rules”.

She added that the naming and shaming is done to ensure that there are consequences for these employers not only for their wallets but also for their reputation.

Bryan Sanderson, Chairman of the Low Pay Commissions, said: “The risk of being named is encouraging businesses to focus on compliance”.

He also added that although targeting large employers who have cheated a great number of workers is fundamental, he is happy to see that HM Revenue and Customs still targets cases where few workers have been involved and those who are at risk of the most serious exploitation.

Frances O’Grady, the Trades Union Congress General Secretary said: “Today’s list should put the frighteners on rogue employers across the country. Pay your staff properly or face hefty fines and get shamed in the papers”. He added that the government should ensure that those sectors where more workers have been affected (shops, salons and hospitality) clean up their act."

Top 10 offenders named in BEIS report:

1. The Best Connection Group Limited, Bromsgrove B61, failed to pay £469,273.83 to 2,558 workers.

2. Transline Group, Calderdale HD6, failed to pay £310,302.12 to 1,421 workers.

3. Primark Stores Limited, Reading RG1, failed to pay £231,973.12 to 9,735 workers.

4. SportsDirect.com Retail Limited, Bolsover NG20, failed to pay £167,036.24 to 383 workers.

5. Edward Mackay Contractor Ltd, Highland KW9, failed to pay £51,403.65 to 4 workers.

6. Payerise 72 Limited, Kingston upon Thames KT3, failed to pay £29,979.27 to 130 workers.

7. The Pines Hotel, Purbeck BH19, failed to pay £20,557.68 to 15 workers.

8. Ramside Estates Limited, County Durham DH1, failed to pay £17,536.59 to 8 workers.

9. Bedruthan Hotel Limited, Cornwall TR8, failed to pay £14,215.61 to 22 workers.

10. First Rate FX Limited, Tower Hamlets E14, failed to pay £11,802.36 to 4 workers.