Debenhams blames payroll error for topping minimum wage ‘list of shame’

Retail giant Debenhams have highlighted how important the reliability of HR systems is as constant payroll errors mean they came top of a list, released by the government, of businesses who failed to pay their employees the minimum wage.

It has led to the department store being fined £63,000 due to underpaying around 12,000 employees an average of £10 each week in 2015, forcing it to pay back around £135,000. They have claimed the error was due to a misinterpretation of the amount of weeks in a calendar when calculating pay, this number is mandated by the government.

Other well known businesses named on the list of 350 included Peacocks, Lloyds Pharmacy and a number of Subway franchises. Hospitality businesses were most likely to fail to meet their salary obligations, with 84 employers in the sector underpaying a total of 563 workers. A Harley Street property company was listed as the worst individual offender, after it was found to have underpaid a housekeeper by more than £11,000.

Most organisations blamed technical errors for their appearance on the list, Melanie Pizzey, CEO of the Global Payroll Association, said: “While we don’t know exactly what the technical error was, they should consider reviewing their payroll and HR software configuration and business rules in conjunction with suppliers, to ensure they have been correctly set up and there are no conflicting rules.”

The negative publicity surrounding such underpayments should act as a wake-up call for HR departments to check that their systems and reporting mechanisms are functioning properly. Business minister Margot James said that, by naming and shaming, the government was “sending a clear message to employers that minimum wage abuses will not go unpunished”.

For any questions or advice regarding your companies payroll systems please contact Free HR support on this website or through social media.

Link to full article by People Management: http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2017/02/16/debenhams-blames-payroll-error-for-topping-minimum-wage-list-of-shame.aspx

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