Some hotel operators are regularly paying staff less than the national minimum wage, running the risk of heavy fines, Caterer has learnt.
It is alleged that one group of hotels in the North of England is regularly paying some staff as little as £4.50 an hour, with employees working as many as 80 hours a week but only being paid for the contracted 40.
Most of the staff involved - largely young or foreign workers - are too afraid to speak out for fear of losing their jobs and, in many cases, live-in accommodation, the sources said. They allege that time sheets with details of overtime are being signed off by local managers, but not then sent to central accounts departments.
Peter Davies, senior manager at business advisory firm Vantis, said, "This is just plain wrong. Even when an employee is paid a salary, as opposed to being paid by the hour or shift, there is still a requirement to meet the minimum wage."
Under minimum wage legislation, there is no such thing as "unpaid overtime": each and every hour worked must be paid for. The only way in which any overtime can be unpaid is if an equal amount of paid time off in lieu is given in the same pay reference period as the overtime worked.
Those flouting the law risk criminal prosecution and fines of up to £5,000.
"The hotel group in question will have a major issue if HMRC comes a-knocking," Davies said.
By Daniel Thomas
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