John Lewis to refund £36m to staff they ‘accidentally’ paid below minimum wage
So it's looking like John Lewis will have to cough up a massive wad of cash to reimburse staff they ‘accidentally' paid below the national legal requirement.
Worked at John Lewis or Waitrose in the last six years?
If so, it looks like you could be due some compensation, as it transpires they've been underpaying thousands of staff members thanks to a technical error.
The retailer has apparently had to set aside £36 million to repay staff – who they refer to as ‘partners' – after the company realised it has been breaching National Minimum Wage laws.
Although they don't know at this moment exactly how many staff members have been affected by the technicality, the company has announced publicly that it's working with the HMRC to solve the issue, and will be putting aside £36m from its profits to ensure all employees are paid what they're owed.
How do you ‘accidentally’ underpay staff?
The technical blunder has occurred thanks to the fact the company uses a pay averaging system, which involves employee wages being paid in equal amounts over the year.
They apparently use this system to help staff with budgeting and financial planning by providing a consistent and stable wage.
However, John Lewis has admitted it found in it's annual review that some staff who worked extra hours some months were technically paid less than the national minimum wage when their pay was averaged out.
So although all staff members were paid ‘correctly' for the entire year, when their pay was averaged out, some were paid less than the correct hourly rate.
John Lewis is keen to stress that, apart from this error, all of their staff are paid above the national minimum, with wages averaging at £8.90 an hour (but if you work at Aldi, you'll be paid a minimum of £8.53 an hour!).
John Lewis Chairman, Sir Charlie Mayfield, has said:
Although partners will, over the course of a year, usually have received the correct pay, in some months where greater than average hours are worked they will have been paid less than the hourly rate stipulated in the NMW Regulations.
But they're not the only culprits!
John Lewis aren't the only company to underpay their staff members, either. Earlier in the year, we reported that hundreds of high street businesses such as Debenhams and Argos were being named and shamed for paying their staff below the legal minimum.
Also on the naughty list were Subway, who created a ‘Sandwich Artist' apprenticeship so they could get away with paying staff just £3.40/ hour!
In fact, even the government themselves have slipped up on this in the past. Awkward!
Make sure you read our guide to employment rights carefully to ensure you're getting what you're legally due in terms of pay, breaks and holiday pay.