H&M fined in U.K. for not paying minimum wage
H&M, the world's largest fashion retailer, is in hot water after it was named and shamed Thursday by the British government for not paying at least the minimum wage to hundreds of its U.K. workers.
The Swedish company is one of 37 caught and fined by the government for breaking the law by failing to adequately pay workers, who were owed a total of more than $270,000.
At H&M, 540 workers were underpaid by about $3,960, although the company insisted this was due to a computer error and all staff have since been reimbursed.
The British government is attempting to crack down on businesses who fail to pay a minimum of $9.90 an hour to any staff over age 21.
It comes as ministers revealed the budget for investigating rogue employers will increase by $5 million to $19 million next year.
Jo Swinson, the business minister, said: "Paying less than the minimum wage is illegal, immoral and completely unacceptable. If employers break this law they need to know that we will take tough action by naming, shaming and fining them, as well as helping workers recover the hundreds of thousands of pounds in pay owed to them."
However, there has been some criticism that the levels of fines dished out to errant companies is too low, with this latest spate of businesses fined just $2,133 each. By comparison, H&M's profits last year were more than $900 million in the last quarter alone.
The government is hoping to change this and is pushing through the Small Business Bill, which will increase the level of fines to up to $30,470 and will be based on the number of employees underpaid rather than per infringement uncovered.
It means that if H&M had been caught once the new legislation passes later this year, it could in theory have been fined as much as $16 million.
Retailers and the leisure industry, such as pubs, restaurants and coffee shops, have been urged by politicians and campaigners in recent years to improve pay and contracts for staff, calling on them to scrap controversial zero hours contracts and adopt the living wage of $12 an hour, or $14 in London.
Campaigners have flooded retailers including department stores John Lewis and Marks & Spencer with e-mails encouraging bosses to pay the living wage, but so far the only retailer to have signed up is soap-maker Lush. The Small Business Bill will also target zero-hour contracts.
A spokesperson for H&M said: "H&M employs more than 9,500 people in the United Kingdom. Unfortunately due to errors within some of our stores concerning time-logging, 540 employees were accidentally underpaid the national minimum wage.
This story originally appeared in The Independent. The content was created separately from Paste BN.
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