Southern Co-op paid thousands of staff members under the National Minimum Wage for fours years in "unintentional breach"
Southern Co-op is among the hundreds of businesses that have been named by the government for paying staff under the National Living Wage and National Minimum Wage.
The breach affected 2,300 of the Southern Co-operative’s employees leaving them short £126,739.33 between April 2016 and December 2020. A spokesperson for the Portsmouth registered company advised that it was an “unintentional breach” with money owed paid to the employers in a one-off payment in 2021.
The list of employers has been released by the Department for Business and Trade and HMRC as it clamps down on companies that are paying below what workers are legally due. 518 businesses were named in all with £7.4 million due to be returned to employers. HMRC can had out fines of up 200 per cent to companies in breach.
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Minister for Employment Rights, Justin Madders said: “There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.
“Ensuring workers have the support they need and making sure they receive a fair day’s pay for a fair day’s work is a key commitment in our Plan for Change. This will put more money in working people’s pockets, helping to boost productivity and ending low pay.”
The Southern Co-operative operates across the south of England running convenience food stores, funeral homes, crematoria and more. A spokesperson advised the breach was due to uniform and salary sacrifice benefits.
The spokesperson said: “Following a standard National Minimum Wage audit by HMRC, it was highlighted that there had been a technical breach regarding legislation around uniform and salary sacrifice benefits which impacted some of our colleagues.
“This was an unintentional breach and colleagues affected received a one-off payment in 2021 to correct the error. A subsequent audit was validated by HMRC and an independent firm of accountants. We’re committed to being a responsible employer and upholding high standards for our colleagues and we have taken appropriate actions for the future.”
A number of national chains were also named and shamed by HMRC including Pizza Express, Lidl, Prezzo, Halfords and JD Wetherspoons to name a few. The full list can be found here.
Locally, Parkers Pets Limited of Portsmouth was also named with their breach coming in the shorter period of April to September 2020.
Azets, a UK accountancy and advisory firm which has an office in Portsmouth, believe the release from the government show that HMRC will be unforgiving as they found one company named who underpaid their staff by an average of 3p a week.
Clair Williams, head of employment tax at Azets, said: “There is simply no margin for error, as our research shows. Even if you are only underpaying a worker by 3p per week, this is enough to put your business on HMRCs radar.
“Ensuring that workers receive the pay they are legally entitled to has been a key priority for HMRC in recent years. Employers suspected of non-compliance, even if it is a minor miscalculation, have been subject to targeted investigations and enforcement campaigns.
“These actions are designed to drive awareness, encourage self-correction and deter future breaches.”
Clair added: “It is essential that employers remain compliant, from reviewing employment contracts and working practices to ensure all time worked is accounted for, to conducting regular internal audits of pay structures and payroll data, and ensuring correct NMW worker categorisation.
“Employers need to stay informed about annual changes to minimum wage rates and also train HR and payroll teams to recognise potential risk areas. Seek expert advice where there is uncertainty because even underpaying a worker by 3p per week has serious consequences; unintentional breaches do not amount to an acceptable excuse for HMRC.