Midcounties Co-op has refunded a record £14,000 in back pay to one of its workers who was underpaid for four years.
It’s a record sum for an individual pay-out.
The issue came to light following an investigation by HMRC. It found that 64-year-old Rodney Sharpe was paid an average of only £3.15 an hour for four years for delivering newspapers. This was in breach of minimum pay regulations
A second delivery worker, Roger Lilley aged 66, was refunded £4,000 after also being underpaid.
Midcounties said the underpayments came about because it had calculated payment by the round without taking into account how long it actually took to make the deliveries. That system had now been amended.
Ben Reid, the chief executive of Midcounties Co-op, said: “The issue that Mr Sharpe and Mr Lilley raised with us was as a result of the way we previously structured this function of our retail operation, and pre-dates our move to central payroll and hourly rates for delivery colleagues.”
Following the two cases, Midcounties began investigating potential underpayments to a further 200 of its workers.
A spokesperson for the Department for Business, Energy and Industrial Strategy, said: “We are clear that when employers do not comply with the law, they will be found out and punished, and we would encourage any worker who’s concerned to contact ACAS. Every complaint received is fully investigated by HMRC.”
The new rates for the National Minimum Wage came into effect on 1 October. The new rates are:
- £6.95 per hour – 21-24 years old
- £5.55 per hour – 18 – 20 years old
- £4.00 per hour – 16-17 years old
- £3.40 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.
The National Living Wage for workers over the age of 25 remains at £7.20 and is due to change from 1 April next year.
Employers caught breaching the minimum rates have to pay the arrears within 14 days and face a penalty equal to 200% of the unpaid wages owed to workers (100% of the unpaid wages for pay periods which began before 1 April 2016) up to a maximum of £20,000 per worker.
The government also regularly publishes ‘name and shame’ lists of employers who fail to pay the minimum wage.
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