John Lewis has been hit with an unexpected bill of £40m after it emerged staff working on Saturdays and Sundays had not been paid properly.
Those who work on weekends and bank holidays had missed out on a premium according to the Working Time Regulations.
The 69,000 staff affected will receive a one-off payment to cover work dating back as far as 2006. Payments will vary, however the department store business said more than half would receive under £120.
But the total is expected to “around” £40m, and will be reported in John Lewis’ half year results, which are due out in September. The mix-up will also add £7m to the company’s pension liabilities.
Pay systems have been updated to ensure that all future holiday payments are correct. This change is expected to add around 0.5% to John Lewis’ annual pay costs.
Tracey Killen, director of personnel, said: “As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our Partners in a way that is both fair and responsible.”