Northern Lincolnshire firms named and shamed by HMRC for not paying minimum wage

Three northern Lincolnshire-based firms have been named and shamed by HMRC for the underpaying of workers.

The cases were brought to a conclusion by the tax collector between 2017 and 2019. Since then, one of the companies has closed.

HMRC has named 202 firms in total and all have since paid what they owed the affected workers. Retail giants WH Smith, Marks & Spencer and Argos are among those named for breaking the minimum wage law, but many of the businesses are small companies including hairdressers, restaurants and pre-school nurseries.

Read more: New figures show worst areas for antisocial behaviour in northern Lincolnshire

In North Lincolnshire, two companies are named. This includes Barton-upon-Humber headquartered Wren Kitchens.

It failed to pay £1,676 out to 16 affected workers, an average of £105 owed for each employee. However, the Local Democracy Reporting Service (LDRS) has been told this was due to a technical issue concerning government childcare vouchers.

A Wren Kitchens spokesperson said: “Wren Kitchens has always set its pay structure to ensure its staff are paid significantly above the Living Wage. In 2019 HMRC conducted a routine review and identified a technical issue relating to a very small number of our staff who were taking advantage of the Government’s salary sacrifice scheme for the provision of childcare vouchers.”

Delta Forest Pines Op Co Limited that runs the Double Tree by Hilton Forest Pines Spa & Golf Resort near Brigg failed to pay £5,472. This affected 17 workers, at an average of £322 owed per worker.

Michelle Stenson, general manager of Forest Pines Spa & Golf Resort, said: “We understand that over three years ago, there was a situation with the hotel’s then management team which fell short of government guidelines. The situation was rectified and we can confirm that since 2019, Forest Pines Hotel, Spa & Golf Resort has paid the government-approved remuneration to staff and also, in the majority of cases, above this.

“The Forest Pines Hotel, Spa & Golf Resort management team prides itself on People First policies, taking care of their staff at every level. We are surprised that this has not been noted by HMRC as their information is clearly out of date.”

There was one firm named in North East Lincolnshire. Grimsby-based MJ Services East Ltd specialised in equipment repair. It was required to repair failure to pay £1,978 to two workers, an average of £989 owed each.

The company no longer exists. It filed for administration in 2019 and remained so until December 2022. It was dissolved in March.

All the businesses named by HMRC this week have since paid back what they owe to their staff and also paid financial penalties. Combined, the 200 firms were fined around £7m.

The companies previously underpaid workers in the following ways:

• 39 per cent of employers deducted pay from workers’ wages.
• 39 per cent of employers failed to pay workers correctly for their working time.
• 21 per cent of employers paid the incorrect apprenticeship rate.

High street retailer WH Smith was the worst offender, according to HMRC, having failed to originally pay around £1 million to 17,607 workers. It blamed this on an error related to its company uniform policy.

A spokesman for WH Smith said: “Following a review with HMRC in 2019, and in common with a number of retailers, it was brought to our attention that we had misinterpreted how the statutory wage regulations were applied to our uniform policy for staff working in our stores.

“This was a genuine error and it was rectified immediately with all colleagues reimbursed in 2019.” Marks & Spencer failed to pay £578,390 to 5,363 workers.

In response, an M&S spokesman said: “Like many other organisations, M&S is only named in the list because of an unintentional technical issue from over four years ago.”

The area with the most firms listed is Westminster, with eight companies. There are 26 hotels on the list, 15 hairdressing or beauty salons, 13 restaurants, and ten providers of pre-primary school education.

Other entries included Blackpool Pleasure Beach Limited, which underpaid 12 staff, and Warrington Wolves rugby league club, which had to pay 34 staff a total of over £7,500.

Kevin Hollinrake, minister for enterprise, markets and small business, said: “Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.

“Most businesses do the right thing and look after their employees, but we’re sending a clear message to the minority who ignore the law: pay your staff properly or you’ll face the consequences.”

A director of the dissolved MJ Services East Limited was approached for opportunity for comment.