// WHSmith ordered to pay £1.02m to thousands of its employees after new uniform policy pushes salaries below the national minimum wage
// The retailer joins M&S, Argos and 200 other companies in being named and shamed for short-changing staff
WHSmith has been forced to pay £1m to thousands of its employees after a new policy to provide their own uniforms caused their salaries to fall below the national minimum wage.
The stationery retailer joins M&S, Argos and 200 other companies to be called out by the Department for Business and Trade (DBT) for short-changing staff between 2017 and 2019.
The retailer was found to have had underpaid 17,607 of its staff by a total of £1.02m in 2022, while its chief executive Carl Cowling took home a pay packet of £1.63m.
The shortfall was related to its uniform policy where workers are required to wear black trousers or skirts and shoes, but the company did not provide them.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
A WHSmith spokesperson told The Times it was a “genuine error” and workers had been reimbursed.
“Following a review with HM Revenue & Customs in 2019, and in common with a number of retailers, it was brought to our attention that we had misinterpreted how the statutory wage regulations were applied to our uniform policy,”
DBT’s report found M&S, which paid chief executive Stuart Machin £2.53m last year, had failed to pay £578,391 to 5,363 of its staff.
The department store retailer said the error came from not paying temporary staff quickly enough but that it “was remedied as soon as we became aware of the issue”.
Meanwhile, Sainsbury’s owned Argos was found to have underpaid 10,399 of its employees a total of £480,094. The supermarket chain blamed a “payroll error” which has been corrected.
Click here to sign up to Retail Gazette‘s free daily email newsletter
payroll error my foot…..Can you imagine the CEO being underpaid
With companies having their payroll managed by computers, it does beg the question of why there isn’t a minimum statutory figue in the software system and who deliberately altered it. these things don’t override themselves, it has to have been a managerial decision at head office and if the police do not investigate this abuse they must explain why but the important point is that companies are working out the minimum they can pay staff, not what the staff are really worth. The lack of control over third party providers also raises concern over supply chain auditing