Nearly 60,000 UK workers will be repaid £7.4m, after an investigation by His Majesty’s Revenue and Customs (HMRC) found their wages had been undercut by their employers.
Between 2015-2022, over 500 businesses were found to have paid their staff less than the National Minimum Wage (NMW) or National Living Wage (NLW). Among the businesses named were major hospitality players including Pizza Express and Prezzo.
Commenting on the findings, Minister for Employment Rights, Justin Madders said: “There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.”
The measures are a wake-up call for hospitality businesses that do not stay abreast of minimum wage rate updates.
Why hospitality businesses must take notice
As part of the government’s raft of worker reforms to ‘Make Work Pay’, there’s been a clampdown on businesses paying staff under the minimum wage. This follows an uplift to the NMW and NLW and improved workers’ rights in the Employment Rights Bill.
In total, 518 businesses were named in the report, including leading hospitality chains. Pizza Express owed £760k to 8,470 workers, while Prezzo had to repay £163k to 2,550 workers.
All of the businesses have now paid back what they owe to their staff. In addition to repaying staff, businesses also faced fines of up to 200% of their underpayment.
According to the report, nearly 60,000 employees had been paid under the national minimum wage. Many of these are likely to be hospitality staff on the frontlines, including kitchen, bar, and front-of-house staff.
What went wrong—and how to avoid it
While it’s never acceptable to underpay your staff, sometimes it’s accidental, especially if you aren’t using a proper payroll system.
Hours can be miscalculated, or deductions for uniforms, unpaid training, and confusion around rates for under-21s or apprentices can all result in accidental underpayment.
Some employers may also be unaware that minimum and living wage rates changed in early April and haven’t yet updated their pay structures to reflect the new legal standards.
To stay compliant amid ever-changing employment laws, invest in reliable payroll and accounting software or outsourcing to a professional accountant who can keep you on track.
It’s also important to regularly audit your payroll systems. Stay updated on current rates, especially for younger workers and apprentices, and train managers and HR teams to spot common compliance errors.
Ultimately, wage compliance shouldn’t be treated as just another admin task. It’s a core part of running a fair, sustainable business, and it deserves to be a top priority.
Costs, risks, and compliance for hospitality firms
Alongside being unfair to your team, underpaying staff (whether knowingly or unknowingly) can have disastrous effects on brand reputation. From media coverage to customer perceptions, being publicly named and shamed can cause lasting damage to your brand.
Regarding the findings, Baroness Philippa Stroud, Chair of the Low Pay Commission, said: “We welcome today’s publication. Underpayment leaves workers out of pocket and disadvantages the majority of employers who do abide by the rules.
“These naming rounds play an important part in ensuring that all workers receive their full wages and that they are aware that there is support for them to ensure that they do.”
Hospitality businesses are under pressure from rising wage costs, business rates, and soaring energy bills. But cutting corners on pay is a false economy.
The government’s message is clear: enforcement is increasing. With public shaming and fines of over 200% of the underpaid amount, both finances and reputation are on the line.
