A spokesperson for Sainsbury’s, which took over Argos last year, confirmed that 37,000 people – current and former colleagues – are due to be paid back an average of £67 each.
In a letter to staff, John Rogers, chief executive of Argos revealed that a routine visit by HMRC shortly after the takeover uncovered pay discrepancies at the retailer.
“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,” Roger wrote.
“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.”
Rogers added that he was “very disappointed” to hear staff weren’t being paid correctly and immediately launched an investigation.
He said they have been working closely with HMRC to resolve the issue as quickly as possible and concluded conversations with the Revenue last week.
Workers who were paid below the NLW prior to December 2016, will receive a payment on 28 February for the amount owed to them.
Argos has also introduced new processes to ensure there can be no repeat of this issue.
“Without doubt colleagues make the difference to Argos and we are looking at pay and benefits across the business,” Rogers added.
“We are pleased that we have already been able to make a number of positive changes, including extending the discount on Sainsbury’s shopping to all Argos colleagues and we are proposing to give most Argos store colleagues a 2% pay increase and to move the basic rate of pay for our over 25 Zone B and C colleagues from £7.20 to £7.66 an hour.”
Last year Sports Direct came under fire for failing to pay staff the National Minimum Wage (NNW) and subjecting them to a regime of searches and surveillance before and after their shifts.
Earlier this week, the government named and shamed more than 350 companies for failing to pay either the NLW or the NMW.
A spokesperson for BEIS said, “Every worker in the UK is entitled to at least the national minimum or living wage. That is why we named and shamed more than 350 employers who failed to pay the legal minimum this week, sending the clear message to employers that minimum wage abuses will not go unpunished.”