The Government handed out four contracts to companies it has previously exposed for failing to pay the minimum wage, i can reveal.
Firms contracted by the Government to provide services including temporary workers and repairing key infrastructure were “named and shamed” on a list of companies who had failed to pay staff the minimum wage.
According to statements from Government ministers in response to parliamentary questions from Labour, it holds at least 12 contracts worth millions of pounds with firms that have been exposed for violating minimum wage law.
Four were awarded after the companies had appeared on the list, with the dates of contracts handed out to the other eight unknown.
The list, which was last published under Boris Johnson’s government in December 2021, included more than 200 firms.
Firms listed had been found in breach by HMRC for violations including docking staff’s pay below the minimum wage, unpaid working time, including for mandatory training or trial shifts, and failure to pay apprentices the correct wages.
In February, the Government said all investigations by HMRC into the firms named had concluded and none are known to be still violating minimum wage law.
Tech minister, Paul Scully, who was a business minister at the time of the announcement, compared the businesses to “Scrooge” and said the companies should know better.
Mitie, which was found to have failed to pay £17,893 to 91 workers in 2021, were given a contract with the Department for Environment, Food and Rural Affairs (Defra) to repair infrastructure a year later. The company is a regular contractor for the government and is worth more than £1bn on the London Stock Exchange.
Mitie’s inclusion on the 2021 list was not the first time it had been called out by the government, having previously been included in a list in 2016 for underpaying one employee by more than £1,000.
Hays Recruitment, which was found to have underpaid 450 workers in 2021, has been given regular government contracts, including one earlier this year with the Department for Health. Hays regularly provides temporary or agency staff for the government. The company provided staffing for the Test and Trace scheme during the Covid pandemic.
Calor Gas, which received a government contract from the Ministry of Defence shortly after being shamed by the government, was found by HMRC to have wrongly reduced the wages of eight employees.
Integrated Water Services, a subsidiary of South Staffs Water, was awarded a contract by Defra less than a year after being exposed by the government for violating minimum wage terms for five workers.
Labour MP Justin Madders, who tabled questions in Parliament about the companies, told i that the Government had undermined its name and shame scheme by subsequently giving the companies contracts.
Mr Madders said: “It’s crystal clear that the Conservatives do not take minimum wage compliance seriously enough. Ministers are making a mockery of their own inadequate ‘naming and shaming’ scheme by rewarding firms found to be illegally underpaying their workers with lucrative contracts that sees them handed taxpayers’ money.”
A spokesperson for Hays Recruitment said: “We take our obligation to comply with legislation very seriously and can confirm that this was an isolated incident a number of years ago in which a very small number of temporary workers were underpaid by a small amount due to an administrative error.
“As soon as this issue was identified in 2018 it was quickly rectified, and the workers were immediately reimbursed and satisfied that we had resolved the matter. We since introduced additional checks to ensure any rate changes are applied immediately to prevent this happening again.”
A Mitie spokesperson said: “At the time, HMRC acknowledged this was an ‘accidental and technical’ breach and steps have been taken to prevent this happening again.”
A Government spokesperson said: “We take enforcing the minimum wage seriously and are clear that anyone entitled to be paid the minimum wage should receive it and take robust enforcement action against employers who do not pay their staff correctly.
South Staffordshire Water and Calor Gas were also approached for comment.
