Argos is being forced to pay £2.4m in wages to more than 37,000 current and former shopworkers, and has been fined nearly £1.5m after a HMRC investigation.
The catalogue and online retailer, which was bought by Sainsbury’s last year, wrote to staff on Thursday after it was found to have been paying less than the legal minimum wage to workers, because it was asking them to attend staff briefings and carry out security checks outside the working hours for which they were paid.
However, Argos will only pay the tax authority £800,000 because it has been awarded a discount on the fine for agreeing to pay up within 14 days.
The underpayments of about £64 per person date back to 2014 and were first uncovered last year ahead of Argos’s takeover by Sainsbury’s. The supermarket said it had changed processes as quickly as possible last December after being made aware of the issue, and would be repaying staff at the end of this month. The underpayment affects 12,000 current employees and more than 25,000 former staff.
The number of workers underpaid by Argos is well in excess of those shortchanged by Debenhams, which on Wednesday became the most prolific offender to be “named and shamed” by the government under a system that came into force in 2013.
The department store chain was fined £63,000 and forced to pay back nearly £135,000 to 12,000 workers. The company said it had underpaid staff by an average of £10 each in 2015 because of a “technical error in its payroll calculations”.
Argos’s underpayment is also well ahead of the £1m awarded in back pay to Sports Direct workers after a HMRC investigation last year.
About 200 people directly employed by Mike Ashley’s retail group and about 3,000 staff hired through temporary employment agencies were found to have been paid less than the minimum wage over four years.
Argos is expected to be named and shamed by the government later this year.