Tesco to reimburse £10m to staff after underpayment discovered

As a new payroll system was being implemented, Tesco discovered that voluntary contributions previously made by affected staff to benefits such as pensions and childcare schemes had been impacted by “errors that resulted in their pay after salary sacrifice not reaching national living wage levels”.

In most cases, the amount to be reimbursed will be no more than £40.

Current staff will get their money by the end of March and ex-employees are being contacted.

Tesco UK and Ireland chief executive Matt Davies said: “As soon as our own review identified this issue we took immediate action to resolve it and establish which colleagues are affected.

“We’ve apologised to our colleagues and our priority now is to talk to them about how this affects them individually, and make any necessary payments.”

The retailer said it has informed HM Revenue and Customs about the oversight and briefed shopworkers’ union Usdaw.

Business Minister Margot James said: “Today’s announcement by Tesco shows our approach to the enforcement of the minimum wage is clearly working.

“We expose companies who fail to pay workers at least the minimum wage, but where there has been underpayment it is preferable that companies identify, and correct, that underpayment themselves.

“It is completely unacceptable for any worker to be underpaid and everybody should check their pay ahead of the national minimum and living wages rising on April 1”.

Tesco is the latest retailer to have accidentally underpaid staff.

Last month it emerged that department store group Debenhams had underpaid 11,858 employees by almost £135,000. It was fined £63,000 as a result.

Argos also revealed it had to pay £2.4m to more than 37,000 current and former staff after they were underpaid as a result of having to attend briefings and security checks outside their contracted hours.