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News - 18 January 2015

How will H&M repent?

Amongst 36 other companies, the government has named [and shamed] fashion retailer H&M for failing to pay their workers the national minimum wage. How should H&M say sorry?

Business minister Jo Swinson named the retail firm in a list published on 15 January for its failure to pay 540 of its workers £6.50 per hour [the mandatory rate] for those over 21 years old.

H&M blamed a logging error. The Company employs over 9,500 people across the UK and has a significant presence in Brighton with a large store in Western Road and Churchill Square.

The figure underpaid - £2,605 or about £4.82 per employee - is not great in the grand scheme of the £177,000 underpaid by all 37 companies. Indeed far worse was Hertfordshire estate agent Kings Group which deprived 53 workers of £53,809. But a golden rule of keeping staff happy is that you don’t get their wages wrong.

Also big players like H&M should be exemplars in the retail sector and this is an embarrassment for them.

Maybe it’s time for the family-controlled company to consider paying the Living Wage which, for employees who are 21 years old is £7.85/hour outside London and £9.15 in the capital. H&M’s website waxes lyrical about its exemplary work in the overseas garment industry to make sure workers get a ‘Fair Living Wage’ but does not appear to recognise the need for the same in the UK where it makes some of its profits.

In the third quarter of 2014 H&M made about £640m profit [not all generated in the UK]. Assuming all 9,500 UK employees are 21 or older [unlikely] and full time [even more unlikely] and assuming a quarter of them work in London [guesswork] it would cost the company just over £30m per annum extra to pay the Living Wage.

For such a big company it seems like a small price to pay to say sorry.

Read related items on:
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Living Wage Campaign

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