Living Wage champion SSE has been named and shamed by the UK Government over its failure to pay five employees the lower national minimum wage.
The Perth-based utility stressed on Tuesday that the situation was due to a “regrettable administrative error” relating to a salary sacrifice scheme and said restitution had been made to each of the workers.
The FTSE 100 company was accredited in 2013 as a Living Wage employer and in November hosted a major national announcement of an uprating of the living wage rate to £7.85 per hour.
The figure is significantly above the adult national minimum wage rate of £6.50 per hour which companies have to pay by law. More than 1,000 organisations across the UK have now signed up to the higher rate to provide a boost to their lowest paid workers.
SSE was yesterday among 70 employers – the vast majority of which are SME businesses – to be named and shamed by the Department of Business, Innovation and Skills (BIS) for failing to pay the national minimum wage.
The department said all of the cases included on the list had been thoroughly investigated by HM Revenue and Customs.
The SSE citation says the firm “neglected to pay” a total of £2,233.95 due to five employees.
The company yesterday released a statement saying it regretted the situation and had moved to ensure there was no recurrence in future.
“Due to a regrettable administrative error five SSE employees were paid less than the National Minimum Wage as a result of a voluntary salary sacrifice scheme which allows staff to lease a car at a competitive rate,” the firm said.
“SSE co-operated fully with HMRC as it investigated the payments, and settled the arrears at the earliest possible opportunity. We have also introduced additional safeguards which will prevent this happening in future.
“SSE regrets this breach and welcomes the approach taken by the Department for Business, Innovation and Skills.
“Early identification of the breach, followed by swift action, meant than none of the employees were disadvantaged for long.
“This robust approach ensures that national minimum wage legislation is strengthened by a rigorous enforcement regime, which SSE fully supports.”
The latest move by BIS takes the total number of company’s named and shamed over minimum wage contraventions to 162.
BIS said the 70 employers named yesterday owed workers a total of over £157,000 in arrears and financial penalties totalling more than £70,000 had been levied as a result.
To support the minimum wage crackdown, BIS said the government was increasing HMRC’s £9.2 million enforcement budget by a further £3m – a move that will allow a further 70 compliance officers to be added to its ranks.
In individual cases, employers have 28 days to appeal against the issuing of a notice of underpayment by the HMRC before being considered for naming.
If no appeal is forthcoming – or is unsuccessful – a further 14 days is given to companies to prove that naming would could cause an issue under exceptional criteria relating to personal risk of harm, national security or other factors.
“Paying less than the minimum wage is illegal, immoral and completely unacceptable,” Business Minister Jo Swinson said.
“Naming and shaming gives a clear warning to employers who ignore the rules, that they will face reputational consequences as well as financial penalties of up to £20,000 if they don’t pay the minimum wage.
“We’re working hard in areas where we know there are particular problems, like the care sector, to make sure staff are paid fairly for the hard work they do.
“We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker rather than per employer.
“We are helping workers recover the hundreds of thousands of pounds in pay owed to them as well as raising awareness to make sure workers are paid fairly in the first place.