Published: Tue, May 09, 2017
Money | By Armando Alvarado

John Lewis sets aside £36m to cover potential wage costs

John Lewis sets aside £36m to cover potential wage costs

John Lewis Group on Tuesday said it has set aside £36 million to cover potential breaches to minimum wage law it may have committed.

Own an innovative start-up?

It said pay averaging was brought in to "support Partners with a steady and reliable monthly income" but that it now believed it meant it did not comply with minimum wage rules.

John Lewis, which includes Waitrose, admitted it now believes that work - over the past six years - breached national minimum wage rules and it was in discussions with HM Revenue and Customs to resolve the issue and ensure future compliance with all minimum pay legislation.

Current and former John Lewis workers, who are known as partners because they jointly own the retailer and share an annual bonus based on profits every year, could receive a top up in back pay as a result of the review.

He added: "We expect to do this as quickly as possible".

Tesco paid affected staff up to £40 each after it found voluntary contributions made by some people to benefits such as pensions and childcare vouchers led to errors that resulted in their pay after salary sacrifice not reaching National Living Wage levels.

Yates on Trump's travel ban: 'Arguments have to be based on truth'
Yates added that McGahn asked for - and was granted - the chance to examine the materials that led the Justice Department to their conclusion.

In February, Debenhams and Argos also revealed staff were paid less than the living wage due to payroll mistakes.

Chairman Sir Charlie Mayfield said: "Although partners will, over the course of a year, usually have received the correct pay, in some months where greater than average hours are worked they will have been paid less than the hourly rate stipulated in the NMW Regulations".

John Lewis and Waitrose employees wait for the announcement of their 2015 bonus in central London, March 12, 2015.

"This requires the commitment of every single partner and in recognition of this I have this year chose to waive my own bonus and forgo an increase in salary". His basic salary rose almost 5% to £1.13m but Mayfield requested not to receive his annual bonus, which amounted to £105,000 the year before, and also took a reduced pension supplement.

John Lewis is planning to cut 387 jobs this year as part of an overhaul of its cafes and restaurants.

The provision was detailed in the partnership's annual report and accounts.

Like this: