Retailer has been fined £1.5m by HMRC after asking staff to undergo briefings and security checks outside paid working hours

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.

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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.

In a letter to staff, John Rogers, who became the chief executive of Argos after it was acquired by Sainsbury’s last September, said the issue had been uncovered by HMRC as part of a “routine visit” and he had been informed after the deal was completed. “Unexpected things do come up as we get to grips with the business,” he said.

“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.”

Rogers said Sainsbury’s was planning to raise wages for the lowest-paid Argos staff aged over 25 from £7.20 to £7.66 an hour, and extend a discount on Sainsbury’s shopping to them. The “national living wage”, the legal minimum for over 25s, will rise from £7.20 to £7.50 in April.

The underpayment at Argos emerged after the government named and shamed a record 360 companies for failing to pay either the national minimum wage or national living wage earlier this week.

A spokesperson for the Department for Business, Innovation and Skills 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.”

Dave Gill, a national officer for shop workers’ union Usdaw, said: “We have been in talks with the company to get this situation resolved as a matter of urgency. Our members in Argos are clearly disappointed to have been underpaid and we are seeking safeguards to ensure that this cannot occur again.”

