Tesco to pay back thousands of underpaid staff

Tesco is reimbursing 140,000 current and former staff who were left underpaid due to a payroll error.

The supermarket is set to pay out about £10m with most workers getting up to £40, although some could get much more.

Some staff were paid less than the National Living Wage after contributing part of their salary to pensions, childcare and cycle to work schemes.

Tesco discovered the errors during a review as part of the implementation of a new payroll system.

In a message to staff, seen by the BBC, the supermarket said it had checked pay for the last six years.

It found the error had occurred at least once for around a third of existing staff, plus 40,000 former colleagues, the message said.

A screenshot of the message sent to staff by Tesco

Tesco added that it would reimburse current employees by the end of March.

It will also be contacting former workers affected by the errors to arrange their payments.

Apology

Matt Davies, 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 Tesco's announcement showed the government's "approach to the enforcement of the minimum wage is clearly 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 1 April," she added.

The National Living Wage will rise from £7.20 to £7.50 an hour next month, for those aged 25 and over.

Last month, HMRC named 360 businesses who had failed to pay the statutory minimum wage.

Debenhams, Subway and Lloyds Pharmacy were among the companies told to refund staff.