Tesco employees have expressed frustration on a month-long delay in a promised pay raise. As a result, they are earning below the minimum wage while the company saves over £17 million.
One staff member told The Guardian: "We are all extremely angry at this especially as this was approved by our union."
Delayed Promised Pay Rise of Tesco
According to The Guardian, Tesco, with more than 330,000 employees, plans to increase its shop workers' minimum pay to £12.02 an hour next month. However, this increase will be delayed until April 28, which means they will still earn for almost a month after the legal minimum wage for those aged 21 and over increases to £11.44 on April 1.
Under HMRC rules, which allowed the delay, the minimum pay rates can be implemented from the start of the "pay reference period" beginning on or after April 1, which for Tesco starts on April 28.
Tesco, one of the biggest employers in the UK, stands to save over £17 million by delaying the pay rise until April. According to The Guardian, approximately 220,000 affected workers will miss the £1 increase per hour.
The Usdaw union, which negotiated the new pay deal, acknowledged the delay, saying that while they preferred an earlier implementation, regulations allowed Tesco to make this decision.
The union emphasized that next month's 9.1% pay rise will make Tesco workers among the highest paid in the sector and benefit hundreds of thousands of employees.
Tesco on the Pay Rise
A Tesco spokesperson told The Guardian that the company was investing over £300 million to bring its hourly pay rate for workers to £12.02, "which is significantly ahead of the national living wage, in a deal that has the full support of Usdaw."
"Our new rate is effective from our April pay period as set out in the HMRC guidelines, and we are fully compliant with all NLW requirements," the spokesperson noted.
"We have a strong track record of making substantial investments in colleague pay and, since 2022, we have increased hourly pay by 26%, investing more than £750m in our colleagues," the spokesperson added.
Tesco further noted it had also upgraded other workers' benefits, including an increase in paternity leave to six weeks and an extension of its colleague discount allowance to £2,000 each year.
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