Argos has been fined £1.5m by HMRC for paying workers less than the minimum wage.
Around 37,000 current and former Argos workers are to receive an average of £64 after ‘incorrect’ payments were discovered.
The company, which is based in MK, scheduled unpaid staff briefings before they had clocked on to their shifts, and security searches which could happen after workers had finished a shift.
The payments will be made at the end of this month, at a total cost of £2.4 million.
John Rogers, chief executive of Argos, said in a letter to staff: “After we 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 of our Argos store systems and processes, which means that some colleagues have been paid below the national living wage.
“In particular, this related to the timings of colleague briefings, which could happen before colleagues had clocked into their shifts and security searches, which could happen after colleagues had clocked out of their shifts.
“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.”
The announcement came after the Government named and shamed 360 businesses for underpaying thousands of workers a total of almost £1 million.
Retail giant Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers.
The company said it made a technical error in its payroll calculations, which resulted in an average underpayment of around £10 per person to affected workers in 2015.