ONE of Scotland's biggest employers has breached the law by failing to pay the minimum wage to thousands of low paid workers across the UK, the Herald on Sunday can reveal.
It has emerged that Capita, one of the country's biggest outsourcing firms, who have current and past contracts across Scottish local authorities, Scottish Government and Police Scotland has been underpaying after an analysis of a period from 2015 to 2021.
It comes as Capita boasted in May that it was paying all staff in 2020 the voluntary and slightly more generous real living wage - which is based on what people need to live - as a minimum.
Present and former staff in Glasgow believe the underpayment will have hit hundreds across Scotland alone and the Herald on Sunday is aware of staff at contact centres in Yorkshire who have also been affected.
The mandatory minimum wage for an adult aged 23 and over from April was £8.91 while the real living wage for the UK is set at a recommended £9.50 per hour.
Capita announced that the salaries of at least 9000 of its lower paid workers amongst 45,000 staff in the UK would increase to the living wage, two years ago this month.
The chief executive Jon Lewis said at the time: “In the second year of our multi-year transformation, I am delighted to be able to announce we will next year begin paying all UK employees the Real Living Wage as a minimum.
“Capita seeks to be a force for good in society and to ensure all of our stakeholders – from employees, investors, clients and suppliers to the communities within which we operate – are treated fairly and with respect.
“Capita’s employees are the lifeblood of the business. Without our people, none of our achievements would be possible.
“Paying UK employees the Real Living Wage is a tangible demonstration of our commitment to responsible business. Additionally, I expect it to deepen Capita’s collective commitment to achieving the goals of our transformation."
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Those who lost money through the national minimum wage failure include past and present employees of the firm which employs 4000 people in Scotland.
They include call centre staff at their Skypark centre in Glasgow who had been paid less than £7 an hour in 2015 at at time when the minimum wage was £6.70 an hour.
Staff who fell short of being paid the minimum wage have started to be reimbursed across the UK.
Former staff at Skypark have spoken to say they have received sums of over £200.
The payments have been arriving after Capita carried out its own national minimum wage audit following complaints.
Letters sent to past and present staff by Capita's chief people officer Will Serle accompanying payments says it was the result of a review of compliance with the National Minimum Wage paid to all employees over the past six years.
The review included deductions take through salary sacrifice, like childcare vouchers, additonal days of annual leave purchased and participation in a cycle to work scheme among other things to determine if individuals had been paid below the minimum wage.
The letter state that it is to "advise you that following the review, we have identified that during your employment your salary dropped to below the National Minimum Wage due to a small number of technical issues. This was unintentional and I want to apologise that his has happened."
Mr Serle told workers that they had addressed the "technical issues" which had led to the underpayments "and have strengthened our policies and practices to prevent this from happening again."
Affected were present and past staff at Skypark that had up to 1000 staff at its peak when Capita won a five-year £93.5m contract to provide its online contact centre in 2014.
In 2018 400 call centre jobs in Glasgow were put at risk after retail giant John Lewis gave Capita staff six months notice as it sought to move its customer contact centre in-house.
One former Skypark call centre worker who worked for Capita for five years till 2020 and received over £250 said the underpayments should never have happened.
"I was one of 1000 workers in Glasgow doing the outsourcing contract for John Lewis internet shopping who was affected and it won't just affect us.
"There will be hundreds here who have been paid below the minimum wage for a number of years, it is unbelievable," he said. "This is an admission in writing that they have broken the law for years. You couldn't make this up.
"Here is a multinational company that have been paying wages that are so low, and were make deductions for various reasons that took people below the national minimum wage. And we were all on the same sort of pay here.
"These letters show that Capita paid below the minimum wage. All the colleagues I know have had the same letter. Another former Skypark call centre worker John Lowe from Maryhill who left Capita five years ago after four years of service was left stunned by the letter which told him he would receive over £200.
"I take it that someone pressured them into this, saying that you have been mispaying these people for so long," he said. "I would assume every member of staff that worked there would be affected."
Since 2014 the UK Government said that rogue employers who do not pay their workers the national minimum wage faced an increased penalty of up to £20,000 as part of a government crackdown.
Until then employers that broke the law had to pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer could face till then was £5,000.
The increased penalties imposed on employers that underpay their workers rose from 100% to 200% of arrears owed to workers.
Capita has never appeared in the 'named and shamed' list which was intended to be produced annually by the Her Majesty's Revenue and Customs of companies for breaking minimum wage laws.
Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates.
Just six employers have been prosecuted for paying employees less than the minimum wage in the past six years, despite tax authorities finding more than 6,500 violations.
HMRC said that the low number of prosecutions reflected a focus on taking civil action rather than using the courts to tackle businesses that do not pay the legal minimum wage.
Pizza Hut, Superdrug and Costco, as well as 136 other companies, were named as ‘rogue employers’ in the government’s list, published in December 2020. In August, John Lewis and the Body Shop were among 191 businesses identified with a total of £2.1 million found to be owed to over 34,000 workers.
An HMRC spokesperson said: "We can’t comment on identifiable taxpayers."
According to research by the Resolution Foundation, only 13% of companies paying less than the minimum wage are caught by HMRC. Using government data, the group estimated there had been at least 11,000 firms underpaying their workers in 2018-19, but the taxman identified only 1,456 of those employers.
Capita refused to discuss the numbers affected, but said the "vast majority" of the underpayments were historical and that it was not a deliberate act.
A spokesman said: "However, we are sorry for any impact this has had on current and former Capita colleagues; and are rectifying the situation and paying those affected what they are owed.
"As our staff in the UK are now all paid the real living wage as a minimum we believe that a similar situation could not occur again."
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