High street retailers Karen Millen, Feather & Black and Shoe Zone have been identified in the government’s latest list of businesses accused of paying staff below the minimum wage.
Of the 179 businesses that the Department for Business, Energy and Industrial Strategy (BEIS) released today for underpaying 9200 workers, the fashion, furnishing and footwear chains were listed at 21st, 93rd and 110th respectively.
BEIS said Karen Millen failed to pay £9847 to 28 workers, Feather & Black failed to pay £1333 to 31 workers, while Shoe Zone failed to pay £804 to 15 workers.
“A routine audit by HMRC in 2016 revealed that a number of our store associates were unintentionally being paid less than the minimum wage when our wardrobe policy was taken into account,” a Karen Millen spokesperson said.
“The wardrobe policy at the time required our store associates to wear Karen Millen items, which they were able to purchase at a discount.
”Karen Millen takes the satisfaction and wellbeing of our staff very seriously. Following completion of the audit by HMRC, we acted quickly to remedy the situation, including arranging to reimburse affected staff and updating our wardrobe policy to ensure there could be no re-occurrence of the issue.”
A spokesperson for Shoe Zone said: “As soon as the company was made aware of this issue by HMRC, which has been common practice within retail for a number of years, management worked with HMRC to remedy the situation as quickly as possible.
“The company now provides shoes for all store employees and contributes financially to allow employees to purchase their own trousers.”
Feather & Black has not yet responded.
A handful of smaller and independent retailers such as clock retailer Ritchies of Edinburgh, Variety Foods convenience stores and auction-based retailer Madbid.com were also identified on BEIS’s list.
The latest data reveals how 9200 workers were underpaid a combined total of £1.1 million, with employers in the leisure and hospitality industries the most prolific offenders.
BEIS fined the employers a total of £1.3 million for breaking national minimum wage laws.
It comes ahead of the next rate rise on 1 April, when the National Living Wage will go up from £7.50 to £7.83 per hour.
The BEIS said apprentices under the age of 19 and those in the first year of their apprenticeship will benefit from a record 5.7 per cent rise.
The BEIS is also poised to launch a campaign to raise awareness of the new rates and encourage workers to speak to their employer if they think they are being underpaid.
“The world of work is changing and we have set out our plans to give millions of workers enhanced rights to ensure everyone is paid and treated fairly in the workplace,” business minister Andrew Griffiths said.
“There are no excuses for short-changing workers. This is an absolute red line for this government and employers who cross it will get caught – not only are they forced to pay back every penny but they are also fined up to 200 per cent of wages owed.
“Today’s naming round serves as a sharp reminder to employers to get their house in order ahead of minimum wage rate rises on 1 April.”
Low Pay Commission (LPC) Bryan Sanderson said: “As the National Living Wage and National Minimum Wage rates rise on 1 April, it is vital that workers understand their rights, and employers their obligations.
“The Low Pay Commission is pleased to see the government maintaining the momentum of its minimum wage enforcement.
“The recent announcement that all workers will have a right to payslips stating the hours they have worked – an idea originally proposed by the LPC – is a positive step.”
Since 2013, the BEIS’s the scheme of listing employers who fail to pay the correct wages has identified more than £9 million in back pay for around 67,000 people.
In addition, more than 1700 employers have so far fined a total of £6.3 million.
Previous retailers to have been named and shamed include Debenhams, Sports Direct and Primark.
The government has also committed £25.3 million for minimum wage enforcement in 2017/18.