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Sports Direct, Minimum Wage and your Business

Sports Direct, Minimum Wage and your Business

Firm news

If you’re not paying your staff minimum wage, you are breaking the law, even if it’s an oversight or unintentional. Sports Direct has been in the spotlight recently about its failure to pay national minimum wage, among other working practices and today, they’ve come to an agreement with HMRC and Unite the Union to pay back pay totalling £1 million.

Alex Lyttle, Associate in Employment & Dispute Resolution at Meade King commented on the Sports Direct situation, saying:

“Employers need to be careful that the procedures they have in place mean they are actually paying the minimum wage.”

Sports Direct didn’t pay its worker the National Minimum wage because of mandatory unpaid searches which were uncovered back in 2015.

These searches left employees queuing to be searched and often added another hour and 15 minutes onto the average worker’s week. In addition, Sports Direct docked its employees 15 minutes pay for being only 1 minute late. Both of these exercises pushed its worker’s pay below the National Minimum Wage.

The law has not been tested here in the UK over whether security searches should be paid or unpaid time at work. But the recent ruling in the European Court which allowed for paid travel time for care workers seems to support the notion that this extra time that workers are required to complete as part of their job should be paid rather than unpaid.

Mike Ashley, who owns Sports Direct, was pulled in front of the parliamentary Business, Innovation and Skills (BIS) committee back in June to explain how his business was treating its employees.

During his appearance in front of the BIS Committee, he admitted that he’d not being paying his staff the National Minimum Wage. Along with the pay issue, there were other practices that had been condemned such as zero hours contracts with exclusivity clauses and a culture of fear to take even one day off sick for serious illnesses.

The deal with HMRC and Unite means that workers at the Shirebrook warehouse can expect back pay in their wages at the end of August. For some, whose back pay goes all the way back to 2012, it could result in an £1,000 this month.

Don’t let your business be exposed to large, backdated wage bills. We can offer you advice on whether your working practices breach employment law.

Contact our experienced Employment Law team now on 0117 926 4121 or contact us online and we will help you.