British-based factory workers producing garments for a string of top fashion brands are being paid less than half the legal minimum wage, a new undercover film claims. Textile firms making products for fashion retailers such as River Island, New Look, Boohoo and Missguided are paying their UK workers between £3 and £3.50 an hour, Channel 4’s Dispatches will allege on Monday night. The national living wage, the legal minimum, currently stands at £7.20 an hour for workers aged 25 and over.

The documentary will add further support campaigners who claim that cheap fashion comes at a cost, including widespread abuse of minimum wage laws, even in the UK. The case follows a Guardian investigation into Sports Direct in December 2015, which revealed that workers at the sportswear chain’s Derbyshire warehouse were receiving less than the legal minimum wage. The workers were eventually awarded around £1m in back pay.

In the new Dispatches film, an undercover reporter gets a job at Fashion Square Ltd, which labelled clothes for River Island. When the reporter told the firm he would usually receive at least £7.20 an hour for work, his boss replied: “You won’t get that here. That’s what I’m telling you. We don’t get paid much for our clothes, and we need to compete with China and Bangladesh. They can get it cheap there. How will they get it made cheaper here? If we pay everyone £10 or £6 then we will make a loss.” The reporter was paid around £3 an hour for work that included labelling River Island garments, Dispatches reports.

The undercover reporter also gained employment in a factory working on garments for New Look, where he was apparently paid £3.50 an hour. A third textile firm, United Creations, paid him £3.25 an hour for work which included packing a jacket for Boohoo and marking up zips on dresses for Missguided, the programme says.

River Island told Dispatches that Fashion Square had been removed from its approved factory list in February 2016. The fashion chain added: “Suppliers were informed not to use this factory for any further orders. Subcontracting without River Island’s approval is a serious breach of our terms and conditions.”

Fashion Square and United Creations denied to Dispatches that anyone at their factories was paid below the legal minimum wage. New Look said the factory had been subcontracted by one of its suppliers without the retailer’s knowledge.

Boohoo said it was unaware that United Creations was carrying out work for one of its approved suppliers. The retailer said it would “not tolerate suppliers paying less than the minimum wage” and that a member of its compliance team had visited United Creations last week.

Missguided said: “We take the allegations … very seriously and demand the highest standards of safety, working conditions and pay from all of our suppliers and subcontractors. We are committed to achieving the standards set by the Ethical Trading Initiative and conduct regular audits and spot-checks of our supply chain. We have begun an internal investigation … we will also ensure these matters are addressed urgently by the supplier in the best interests of the workers.”

New Look said the company was “extremely concerned” by the Dispatches revelations. The retailer said it had reduced the number of UK suppliers from 104 to 19 since 2011, and that it audits them regularly.

Channel 4’s Dispatches airs on Monday at 8pm.