Using prepaid to profit from wages
Some workers at Sports Direct are paid less than the minimum wage through several fees, many associated with prepaid cards.
Sports Direct, a UK-based retailer, and its owner, Mike Ashley, face a probing from the Business, Innovations and Skills committee after an investigation into its Shirebrook warehouse.
One of the revelations from this investigation is that some workers, mainly from Eastern Europe, earn less than the minimum wage due to prepaid card fees.
The prepaid card, issued by credEcard, has a number of fees attached. Sports Direct charges £10 for the card and a £10 monthly fee, usually only £2 when through credEcard. In addition, there is a £0.10 charge for a text notification when withdrawing cash.
The practices contributed to some staff being paid around £6.50 an hour, as compared to the statutory rate of £6.70.
Chris Birkby, MD of agency group Transline, which provides workers for Sports Direct, told the committee that the cards are optional. He also defended them by describing the prepaid cards as a way to receive wages quickly and avoid high charges elsewhere.
He also claimed these were to help workers without bank accounts and could be dropped at any time. However, he also admitted that the agency make a profit or ‘rebate’ from the prepaid debit cards.