Tesco to pay back staff following significant payroll error

One of Britain’s biggest businesses was left red-faced after it announced last week that it would be reimbursing 140,000 present and previous employees, following a mistake involving its payroll.

The error could mean that Tesco pays a total of £10million to the individuals affected.

The supermarket giant had made the mistake – which meant that a sizeable section of its workforce received less than the National Living Wage – while calculating pay for staff who had contributed a portion of their salary to a pension scheme, childcare or the company’s cycle-to-work scheme.

The blunder came to light during a review which was organised as part of the introduction of a new payroll system at the FTSE 100 firm.

The BBC has reported that around a third of the current workforce have been affected, in addition to 40,000 people who had since left the business.

Matt Davies, the chief executive of Tesco UK and Ireland, 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.”

Business Minister Margot James said the supermarket’s announcement showed the Government’s approach to enforcing minimum wage legislation was working.

“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^st,” she added.