Following government investigations, Argos has been forced to pay £1.5 million to over 12,000 workers.
The store was the largest found on the 233 list of retailers that had been found not paying employees the minimum wage.
“It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers.” said Business Minister Margot James.
“Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the Government will come down hard on those who break the law.
“Common errors made by employers in this round included deducting money from pay packets to pay for uniforms, failure to account for overtime hours, and wrongly paying apprentice rates to workers.”
As well as paying employees the extra money owed, they will also have to pay a government fine.
Director at HM Revenue and Customs, Melissa Tatton, said the Government was “committed to getting money back into the pockets of underpaid workers, and continues to crack down on employers who ignore the law”.
Sainsbury’s (LON:SBRY), who bought Argos last year, raised the issue in February.
“Shortly after we (Sainsbury’s) acquired the Argos business last year it was brought to my attention that, as part of a routine visit, HMRC had uncovered an issue with some Argos store systems and processes, which meant that some colleagues had been paid below the national living wage.” said chief executive of Argos, John Rogers.
“Sainsbury’s prides itself on being a trusted brand where people love to work and I was, therefore, very disappointed to hear this and launched an immediate investigation.
“I am pleased to say the issue was resolved quickly and processes have been updated to ensure this cannot happen again.”
All members of staff have now received money owed.