Co-op repays workers over £40,000

Lincolnshire Co-op has been ordered to pay workers over £40,000 in the Government’s National Minimum Wage Naming Scheme. 

The scheme exists to increase awareness of the National Minimum Wage (NMW) Legislation and to deter employers who underpay their staff.

The Co-op was named in Round 22 of the scheme and was among almost 500 employers who were fined over £10m and repaid £6m to workers.

The community retailer’s transgression dates back to a review carried out the HM Revenue and Customs (HMRC ) in 2022 – before the recent increases in NMW.

The review found that employees, who rented Lincolnshire Co-op owned accommodation, were deemed to have been underpaid, as their rental payments took them underneath NMW. It related to 12 workers who were repaid a total of £42,103.11.

A spokesperson for Lincolnshire Co-op said: “As well as a community retailer, we are also a residential landlord with around 100 rental properties. 

“Colleagues who had independently rented our accommodation through letting agents - which was unrelated to their employment or remuneration - were deemed to have been underpaid by HMRC, as their rental payments took them underneath National Minimum Wage.

"We appealed to various government bodies at that time as we felt our situation justified an exemption, similar to that allowed to local authorities/social landlords but unfortunately this was unsuccessful.

“In line with the findings of the review, we refunded past and current employees monies owed and we are no longer renting accommodation to Society colleagues.

“This legislation is welcome to protect employees from being exploited, especially when accommodation is part of the remuneration, or benefits package offered. However, we do believe that there may be more exemptions possible in cases where accommodation is independent from employment. We hope this will be considered in future reviews of the legislation.”

The Government’s stance is that NMW enforcement does not just protect workers, but also those businesses that adhere to the rules and sends a clear message that it will not tolerate those who short-change their workers, regardless of their size or sector.

Business Secretary Peter Kyle said: “Every worker deserves a fair day’s pay for a fair day’s work, and this government will not tolerate rogue employers who short-change their staff.

“I know that no employer wants to end up on one of these lists. But our Plan to Make Work Pay cracks down on those not playing by the rules.

“This ensures a level playing field where all businesses pay what they owe whilst workers receive the boost to their living standards they deserve.”

Workers who fear they are being underpaid can visit https://checkyourpay.campaign.gov.uk