Several Scottish companies are among a list of 202 employers that are being named by the UK Government for failing to pay their lowest paid staff the minimum wage.
They include Arnold Clark, Loganair, Macdonald Hotels, Baxterstorey and The House of Bruar.
Each of the businesses were found to have failed to pay their workers almost £5m, in a clear breach of National Minimum Wage law, leaving around 63,000 workers out of pocket.
Minister for Enterprise, Markets and Small Business Kevin Hollinrake said: “Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.
"Most businesses do the right thing and look after their employees, but we're sending a clear message to the minority who ignore the law: pay your staff properly or you'll face the consequences."
The businesses named have since paid back what they owe to their staff and have also faced financial penalties. The investigations by HM Revenue and Customs concluded between 2017 and 2019.
Among the companies, 39% of employers deducted pay from workers’ wages, 39% of employers failed to pay workers correctly for their working time, and 21% of employers paid the incorrect apprenticeship rate.
Minister for Scotland Malcolm Offord said: "The minimum wage is an important guarantee for workers and this government is upholding that standard by calling out businesses - regardless of their size - who fail to pay up.
"By naming the firms, we are underlining the fact that paying the national minimum wage is not optional - it's a legal requirement."
Bryan Sanderson, chair of the Low Pay Commission, said: “The minimum wage acts as a guarantee to ensure all workers without exception receive a decent minimum standard of pay - where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses.
“Regular naming rounds should be a useful tool in raising awareness of underpayment and helping to protect minimum wage workers.”
Since 2015, the budget for minimum wage enforcement has doubled, with the UK Government having ordered employers to repay over £100m to one million workers.
Scottish companies on the list include:
- Loganair - which failed to pay £24,367 to 43 workers.
- OMI Facilities - which failed to pay £20,622 to nine workers.
- Macdonald Hotels - which failed to pay £16,111 to 64 workers.
- Baxterstorey Scotland - which failed to pay £13,618 to 186 workers.
- Arnold Clark - which failed to pay £12,215 to 48 workers.
- The Park Hotel Ayrshire - which failed to pay £10,088 to 129 workers.
- Top Nails Livingston - dissolved in September 2021 - which failed to pay £9,266 to five workers.
- M1 Valet Centre - dissolved in December 2019 - which failed to pay £7,807 to three workers.
- The House of Bruar - which failed to pay £5,543 to 57 workers.
- Tenpin Scotland, trading as Pro Bowl Glenrothes - which failed to pay £5,174 to one worker.
- Royal Northern & Clyde Yacht Club - which failed to pay £4,426 to one worker.
- The Inveraray Inn, trading as The George Hotel - which failed to pay £2,933 to 25 workers.
- OMI Management - which failed to pay £1,983 to two workers.
- Mrs Patricia Jervis, trading as Bumble Beez - which failed to pay £1,768 to seven workers.
- Sahara Global, trading as A1 Hand Car Wash - which failed to pay £1,087 to four workers.
- Portal Security - which failed to pay £927 to 55 workers.
- LDH Hotels, trading as The Tongue Hotel - which failed to pay £771 to 11 workers.
- Ms Claire Frances, trading as Claire Frances Hairdressing - which failed to pay £739 to one worker.
- Social Care Alba - which failed to pay £650 to eight workers.
A spokesperson for Macdonald Hotels said: “These unfortunate issues were caused by the introduction of a new payroll software system which we have now scrapped, and all relevant staff members were reimbursed by double the amounts involved.”
A spokesperson for Loganair said: “Loganair’s inclusion in this list relates exclusively to an optional salary sacrifice programme operated more than four years ago, which enabled employees to voluntarily increase their pension contributions or to purchase electric vehicles.
“In providing its employees with options as to how to spend their own income, the choices made by a small number of staff led to their take-home pay falling below the National Minimum Wage at the time.
“This issue was rectified by Loganair and closed by HMRC in March 2019,“ the statement added. “The Department for Business & Trade, which administers the National Minimum Wage scheme, fully accepts this issue was raised and resolved more than four years ago so it is with great disappointment to see our inclusion in today’s list so long after the event.”
A spokesperson for BaxterStorey said: “In 2018, HMRC made us aware of an administrative error that impacted some employees' pay.
“We have worked closely with HMRC to put processes in place to ensure this error doesn’t happen again.
“We deeply value the contributions of our employees and remain dedicated to upholding a work environment that is fair and supportive for everyone.“
A statement from Arnold Clark pointed out that it currently has a workforce in excess of 11,500 employees, with an annual payroll cost of more than £450m.
“Our Arnold Clark Living Wage rate applies to all employees - other than apprentice roles - and, for several years, has been 5% to 9% above the UK National Living Wage or National Minimum Wage rate that applies for over 23 year-olds.
“Due to a benefit provided to employees that was later deemed to be a disallowable deduction for National Minimum Wage purposes, we incurred a minor technical breach of National Minimum Wage legislation in a small number of unique cases a number of years ago.
“Over a four-year period this resulted in 48 employees being underpaid a total of £12,215,“ the statement continued. “All arrears were repaid to the employees affected and we are taking appropriate steps to allow us to continue to provide benefits that are desirable to employees and compliant with National Minimum Wage legislation.“
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