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John Lewis allocates 36 million pounds to comply with NMWR

By Vivian Hendriksz

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The John Lewis Partnership, the employee-owned group which oversees department store group John Lewis and Waitrose supermarket, announced today that it has set aside 36 million pounds after finding out it may not have complied with the government National Minimum Wage Regulations.

In a statement released on Tuesday, alongside its annual report, the company states that it will work together with HM Revenue and Customs (HMRC) to ensure all of its pay arrangements met its “specific criteria.” In particular, the John Lewis Partnership and HMRC will look at its practice of “pay averaging” which aims to “smooth out” an employee’s pay over the year to make sure a consistent amount is paid to them each month.

“This arrangement was implemented to support Partners with a steady and reliable monthly income, but we now believe this arrangement may not meet the strict timing requirements for calculating compliance with the NMW regulations,” wrote the John Lewis Partnership in a statement on Tuesday. The retail group has set aside 36 million pounds to cover any retrospective payments that may be due to any current or former employees for the year ended January 28, 2017.

The announcement follows on from John Lewis previous decision to cut employee bonuses for the year to their lowest level since the 1950s and sees Chairman Sir Charlie Mayfield waiver his 66,000-pound bonus for the year. “In the Annual Report we have said that arrangements have already been made to make these payments and contact former Partners,” said Sir Charlie Mayfield, Chairman of the John Lewis Partnership.

“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.”

John Lewis
John Lewis Partnership
national minimum wage