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Tesco to reimburse workers £9.7m following payroll review

Tesco is to reimburse 140,000 current and former workers a total of £9.7m after it failed to pay them the national living wage.

The reimbursement for the majority of workers is expected to be up to £40 and follows an internal review of its reward systems.

The situation arose during the implementation of a new payroll system, when it was revealed that the voluntary contributions made by some workers to benefits such as pensions, childcare vouchers and cycle-to-work schemes, led to errors that resulted in their pay after salary sacrifice not reaching national living wage levels.

Tesco said it is in the process of contacting affected workers, and will ensure they all receive their reimbursement payments by the end of March. It will also be contacting former employees to arrange payments.

“As soon as our own review identified this issue we took immediate action to resolve it and establish which colleagues are affected,” said Matt Davies, Tesco chief executive for the UK and Republic of Ireland.

“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.”

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