Next apologizes to staff after IT problems caused months of underpayment | Next

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Retailer Next has apologized to staff for months of underpayment of wages caused by the botched implementation of a new IT system.

The FTSE 100 company has been working for months to stem the problems caused by a decision to outsource its payroll functions to US technology company Oracle. The first problems appeared in February and affected workers paid by the week and those paid by the month.

The problems have deprived some Next employees of their wages during the cost of living crisis amid rapid consumer price inflation that is reducing workers’ purchasing power.

The retailer is paying some store workers £9.36 an hour, below the Living Wage Foundation’s recommended hourly rate of £9.90 outside London and £11.05 inside the capital.

Next is run by conservative peer Simon Wolfson. As chief executive, Lord Wolfson will receive £4.4million in pay this year, the highest since 2015, after investors backed a 50% pay rise in May. The Church of England pensions board has criticized ‘significant increases in executive pay at consumer-facing companies such as Next, where the workforce is not recognized as benefiting from a living wage”.

It is not the first time this year that pay issues have hit a major UK employer. Asda, the supermarket chain owned by petrol station billionaires Mohsin and Zuber Issa and private equity fund TDR Capital, has admitted some workers have lost up to £500. Its external payroll provider has made nearly 11,000 errors in recent months, affecting the salaries of 5,500 employees.

Next declined to say how many of its 43,000 workers were affected, but a spokesperson said the number was down from the peak. A spokesperson said: “We expect to continue to make significant progress in the weeks ahead.”

Employees have been underpaid by up to £200 a month, while some have been forced to rely on food banks or give up holiday days to make ends meet, according to The Sunday Times, which first reported the issues.

Next usually designs its own software, but struggles to make Oracle’s software work with its own. Instead, he was forced to appoint a dedicated team to try to catch mistakes and pay out the missing money to workers every week.

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In some cases, staff members also had pension contributions deducted from their salary which were then not invested in pension funds. Next said it would ensure these issues were also rectified and any losses to workers repaired.

“Over the past few months, we have encountered a number of issues with our new payroll system and have been addressing them urgently,” the spokesperson said. “This is one of the few instances where Next has outsourced critical software and we have learned important lessons about integrating our in-house applications with third-party platforms.

“We are fully aware of the problems these payroll errors have caused for some of our colleagues. We sincerely apologize to everyone involved and assure them that we are resolving these issues as a priority. »

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