PIZZAEXPRESS, the restaurant group at the centre of a row last week about the minimum wage, has blamed a government minister's gaffe for a sharp fall in its share price.
Financial director Glen Tomlinson said that the group's shares dropped by 12% last week after trade and industry minister Ian McCartney, speaking at a trade union conference, claimed the group had to pay out £750,000 for failing to comply with the regulations. McCartney was incorrect.
Tomlinson said that the group paid out £250,000 in backpay to waiting staff last month after reports revealed that it was breaking the law by continuing to pay £3.10 an hour.
The company did this because it believed that as cash tips brought wages above the £3.60 hourly minimum it was within the law (Caterer, 29 April 1999).
Tomlinson said: "It's a debacle by the government. The minimum wage was set up mob- handed and we were unable to get clarity or specific information when we needed it. We sought legal advice and believed we were complying."
Waiting staff now receive £3.60 an hour and keep their tips. Many other restaurant chains have used the new regulations to put the tips through the payroll to make up the shortfall. This complies with the regulations but may result in a lower take-home wage for staff than that received by PizzaExpress staff.
The Inland Revenue confirmed this week it is investigating 1,100 companies over possible breaches of minimum wage law.
by Christina Golding