A government crackdown on companies failing to pay minimum wage has resulted in over £7.3m repaid directly back to employees.
Almost 400 firms including Hovis and Costa were identified in a list published by the government after it found around 60,000 of the lowest earning workers across the country had been underpaid.
Arrears adding up £84,676 were owed to 119 Hovis staff members for a period of employment between 1 April 2018 and 31 January 2024, working out at a little over £711 each. Costa, meanwhile, underpaid 2,759 of its workers an average of £54.31 each between 21 April 2017 and 17 November 2022.
British Baker has approached Hovis and Costa for comment.
On top of the wage repayments, the 389 businesses named on the list were also issued with penalties totalling around £12.6m.
The government said it wanted to make it clear that workers won’t be made to pay for the mistakes or negligence of those they work for, regardless of how big or well-known they are.
“The vast majority of businesses in this country do the right thing by paying their staff properly and playing by the rules,” commented business secretary Peter Kyle. “It’s not fair on them when others are able to get ahead by not paying the wages their workers are owed.
“A good employer doesn’t build their business on the back of unpaid wages, and I look forward to working with the new Fair Work Agency to ensure its powers are used to crack down on those who think the rules don’t apply to them,” he added.
Costa’s largest UK franchise partner, Scoffs (Essex) Limited, was also among those named and penalised along with Exeter-based bakery chain The Crusty Cob, which closed all nine shops just over a year ago after becoming unprofitable.
New enforcement body
The list marked the first ‘naming round’ since the Chancellor’s Autumn Budget commitment to publish them more frequently. It comes before the 7 April start of the Fair Work Agency, a brand-new body formed through the recently passed Employment Rights Act to bring workers’ rights enforcement under one roof for the first time. It will not only continue the enforcement of minimum wage laws compliance but also soon start tackling denial of holiday and sick pay.
Further increases in National Living Wage (NLW) and National Minimum Wage (NMW) were announced in the Autumn Budget. From 1 April this year, the NLW will go up 4.1%, the NMW by 8.5% for 18‑20 year olds, and by 6% for 16‑17 year olds or apprentices.
Day-one rights to Statutory Sick Pay, paternity leave, and parental rights are also to be delivered next month, although the government made a U-turn last year on its planned policy to grant employees day-one right to claim unfair dismissal – it is being reduced from 24 months to six months instead.
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