Four Welsh employers have been named by the UK Government for failing to pay the minimum wage to their workers. These are among 202 employers across the UK ordered to repay workers. Between them they face penalties of nearly £7m after breaches left 63,000 workers out of pocket.
Welsh companies being named by the government range from hotels to a recruitment firm. One employer failed to pay more than £20,000 to their workers. The offending companies in the UK range in size from small businesses to large multinationals that employ thousands of people across the UK.
In Wales they range from those that employ a handful of staff to one that underpaid more than 200 employees. Across the UK, some household names have been revealed as scrimping on paying staff including Marks & Spencer, Argos, WH Smith, and Lloyds Pharmacy.
Investigations by His Majesty’s Revenue and Customs concluded between 2017 and 2019 the businesses named in the UK Government's list have since paid back what they owe to their staff and have also faced financial penalties. The Welsh companies named in the investigation by the government are from Criccieth, Wrexham, Powys and Caldicot.
The Welsh companies on the list:
- The Lion Hotel (Criccieth) Limited, trading as The Lion Hotel, Criccieth, LL52, failed to pay £20,322.27 to nine workers.
- Twenty Four Seven Recruitment Services Limited, Wrexham, LL13, failed to pay £17,049.34 to 213 workers.
- St. Nicholas House Ltd, near Montgomery, Powys, SY15, failed to pay £1,178.53 to two workers.
- Forza GB (Great Britain) Ltd, Caldicot, NP26, failed to pay £721.34 to two workers.
At a UK level the greatest numbers came from WH Smith, which failed to pay £1,017,693.36 to 17,607 workers, and Lloyds Pharmacy Limited, which failed to pay £903,307.47 to 7,916 workers.
The employers named on June 21 by the UK Government previously underpaid workers in the following ways:
- 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.
The UK Government said that since 2015 the budget for minimum wage enforcement has doubled with the government having ordered employers to repay more than £100m to a combined one million workers. They also said that whilst not all minimum wage underpayments are intentional "there is no excuse for underpaying workers".
Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates. They also face hefty financial penalties of up to 200% of arrears, capped at £10,000 per worker, which are paid to the government. Each of the companies named have paid back their workers and were forced to pay financial penalties.
The National Living Wage (NLW) rose to £10.42 per hour on April 1, 2023 – an increase of 92p per hour. All employees in the UK aged 23 and above qualify for the NLW so from April 1, 2023, it has been a legal requirement for all employers in the UK to pay their employees aged 23 and above the new rate at least.
New minimum wages for workers aged under 23 also came into law on April 1, 2023. The new rates are a minimum of £10.18 per hour for 21- to 22-year-olds, a minimum £7.49 per hour for 18- to 20-year-olds, a minimum £5.28 for 16- to 17-year-olds, and a minimum of £5.28 for apprentices.
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."
Welsh secretary David TC Davies said: “The UK Government is doing everything it can to help people with the cost of living. We have consistently raised the minimum wage and from April this year the rate was increased to £10.42. It’s vital that employers in Wales ensure their workers are properly and fairly paid and it’s right that those who do not do so face the consequences.”
All four Welsh companies were approached for comment. A spokesperson for The Red Lion said: "This matter was an administrative error with the nine individual who were living in. The error occured in our payroll regarding accommodation costs. This was brought to the attention of HMRC by ourselves and rectified immediately. All our staff have always been paid NMW or above."
