Three charities have been named in a government list of organisations that previously failed to pay the minimum wage to their lowest-paid workers.
The Department for Business and Trade (DBT) “named and shamed” 202 organisations this week in breach of national minimum wage (NMW) law after failing to pay nearly £5m to around 63,000 workers.
Its list includes United Church Schools Trust, a charitable company with an income of £130m, Little Sunbeams Pre-School (Portsmouth) and St Mark’s Pre-School in Salisbury.
The charities, alongside the other organisations named in the list, “have since paid back what they owe to their staff and have also faced financial penalties”, DBT said.
United Learning: Surprising and disappointing
The list says that United Church Schools Trust “failed to pay £554.82 to two workers”.
United Learning, the trading name of the charitable group that comprises United Church Schools Trust and United Learning Trust, was originally fined £1,058.28 which was then reduced to £529.14 due to prompt payment.
The group told Civil Society that it was surprised and disappointed to appear in the list, adding that it is a compliant employer that pays its staff above the NMW.
It said the breach, which affected two employees in October 2018, occurred because of deductions in their wages made to recover previous overpayments.
A spokesperson for United Learning said: “This was a technical breach rather than any attempt to pay below the national minimum wage and was immediately rectified when it came to our attention in 2018.”
Pre-schools: ‘Clerical error’
Little Sunbeams Pre-School (Portsmouth) “failed to pay £3,561.97 to nine workers”, with arrears starting on 25 August 2014 and ending on 31 August 2018, the list said.
The charity, whose annual accounts for the reporting years ending 31 July 2021 and 31 July 2022 are overdue by 388 and 23 days respectively, said that the figures published by DBT were incorrect.
A letter sent from HMRC to the pre-school in 2019, seen by Civil Society, confirms that “the correct NMW had not been applied in relation to” two people “who are 19 years of age or over and have completed their first 12 months of their apprenticeship or reached 19 years of age during their apprenticeship”.
Isobel Edwards, one of the charity’s trustees, said that “it was a mistake made by the accounting firm that was used by Sunbeams and rectified straight away and in accordance with HMRC”.
She added that it was two staff members, not nine, who were “mispaid during their apprenticeship”.
“I said everything in our letter of appeal and even our local MP could not stop our pre-school being named in circumstances beyond our control,” Edwards added.
St Mark’s Pre-School, whose reporting to the Commission is overdue by 358 days, also “failed to pay £870.55 to six workers”, according to DBT’s list.
Its committee said: “Following a recent government publication the pre-school committee are aware that St Mark’s Pre-school has been named for not paying staff the minimum wage.
“The pre-school committee would like to reassure you that this was picked up by HMRC following a random check in 2016. This was a clerical error linked to the number of days worked within an academic year. HMRC accepted that it was an error made in good faith and levied a small fine. The few practitioners involved received back promptly and the pay procedure changed with immediate effect.”
Paying minimum wage is ‘non-negotiable’
The breaches in the list occurred between 2013 and 2019, with HMRC concluding its investigations between 2017 and 2019.
Nearly two-fifths of the employers named in the list deducted pay from their workers’ wages while another two-fifths did not pay employees correctly for their working time. The remaining 21% paid the incorrect apprenticeship rate.
DBT said that while “not all minimum wage underpayments are intentional, there is no excuse for underpaying workers”.
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.”
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