John Lewis shells out £36m for potential minimum wage error

John Lewis has set aside £36 million after admitting that its contractual hourly rates of pay may not have complied with the Government’s national minimum wage regulations.

The department store chain, which was named the most desirable company to work for by Linkedin last year, insisted that its rates have never been below the national minimum wage (NMW), but said its ‘pay averaging’ arrangements “may not meet the strict timing requirements for calculating compliance with the NMW regulations”.

The retailer said in a statement today that it intends to work with the HM Revenue & Customs department to understand if all of its arrangements meet the specific criteria of the regulations.

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Chairman Charlie Mayfield has also waived his bonus for 2016-17, which would have been £66,000.

Sir Mayfield said: “In our Annual Report and Accounts we have made a provision for any payment we may be required to make to comply with the National Minimum Wage Regulations. In the Annual Report we have said that arrangements have already been made to make these payments and contact former Partners.

“HMRC are aware and we intend to work with them in order to resolve some of the key points regarding the way the NMW Regulations apply to our pay arrangements and practices. We expect to do this as quickly as possible. However, it is likely these discussions will take some time to be completed.”

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