A care home and a drugs and alcohol community interest company have been “named and shamed” by the tax office for not paying the national minimum wage (NMW) to workers.
However, both companies have claimed their inclusion in the list of 37 companies by Her Majesty’s Revenue and Customs (HMRC) is unfair. In both cases, it was the result of a dispute with former disgruntled employees over training payments.
Marc Rowland, managing director of Ultimate Care in Ipswich, said: “Over three years and a wage bill of £798,000 they [HMRC investigators] found seven employees had been underpaid in their last pay packet. This was because of a training agreement in place with those employees which authorised me to deduct the costs of the training from their wage.
“We did this following legal advice but HMRC advised me that we cannot do that if it brings the employee’s wage under the national minimum wage. We changed that policy immediately and our legal advisers have taken full responsibility and refunded us the money we had to pay which was £617.”
Counted4, a drugs and alcohol community interest company, neglected to pay £931 to a worker in a similar dispute with a senior team manager who was on a salary of £30,000pa.
“We reclaimed the money when they [the manager] left the company at short notice. When it was brought to our attention we repaid the amount and have now issued legal action to recover the outstanding debt.”
Counted4’s Chief Executive John Devitt said: ‘As an agency that stands up for some of the most stigmatised and under-represented people in society, we strongly resent inclusion on this list, for what was essentially a dispute with a well-paid ex-employee.”
HMRC said the 37 cases named were thoroughly investigated after workers made complaints to the free and confidential Pay and Work Rights Helpline. It’s budget has been increased by a further £3m to investigate companies not paying the minimum wage.
New legislation is also in progress to ensure penalties of up to £20,000 can be applied to each underpaid worker rather than per employer. The NMW is current £6.50 per hour for an adult over 21 years.