SOUTH Lakeland businesses have hit back at being named and shamed among 260 UK employers for not paying staff minimum wage rates.

Landmark Lake District hotel, The Low Wood Bay, at Windermere, was found to have underpaid 34 members of staff more than £7,340 between them.

Kendal builders and joiners Tomlinson Wightman were also named, having underpaid three workers a total of £462.

They were named by the Department for Business, Energy and Industrial Strategy (BEIS) for failing to pay National Living Wage and National Minimum Wage rates.

David Neale, the commercial director for Low Wood Bay operators English Lakes Hotels, said there was frustration within the business because they felt they had only been included on a technicality and insisted workers were paid at least the minimum rates.

He said a lot of employees paid a security deposit for accommodation during their employment, which the HMRC used to calculate a net payment of below minimum wage. Mr Neale added that what they did not consider was an interest-free loan given to workers which offsets the deposit they paid at the start of their employment.

"We as a business are very frustrated and disappointed to appear on the list," he said. "Firstly, we absolutely pay at least national minimum wage and secondly, the issue that has led to us appearing is a technicality that we have raised and debated with HMRC.

"On a technicality linked to deposits on accommodation, HMRC calculated less than minimum wage. The reality is we always pay our staff at least the minimum wage."

Tim Tomlinson, co-owner of Tomlinson Wightman, said a mix-up between BEIS staff and his own workers had led to the Sedbergh Road business' inclusion.

"It really has upset us because it couldn't be further from the truth as to how we run our business," he said. "We look after our lads because they're our bread and butter, I feel a bit aggrieved."

Mr Tomlinson added the three workers, who all still remain in employment with the firm, were immediately paid monies deemed to be owed.

Business Minister Margot James said: "There is no excuse for not paying staff the wages they're entitled to and the government will come down hard on businesses that break the rules.

“That’s why we are naming hundreds of employers who have been short changing their workers; and to ensure there are consequences for their wallets as well as their reputation, we’ve levied millions in back pay and fines.”

If workers are concerned they are not being paid the correct rates then they can seek advice from workplace experts Acas.

Since 2013, the scheme has identified £8 million in back pay for 58,000 workers, with 1,500 employers fined a total of £5 million.