As many as 37,000 Argos workers are to receive back-pay of £64 each, after the company failed to pay them the National Living Wage (NLW).
Sainsbury’s, which owns the company, admitted that staff had not been paid for attending briefings before their shifts started.
They were also required to undergo security searches after clocking off.
Last year Sports Direct had to refund workers a million pounds for spending time unpaid in security queues.
Earlier this week the government named and shamed other firms breaking the law.
It said 360 businesses had failed to pay either the National Living Wage or the National Minimum Wage (NMW).
Sainsbury’s said it discovered the mistake after it took over the Argos business six months ago, and after a routine visit by HM Revenue and Customs.
The underpayments were all made before December 2016.
In a letter to staff, John Rogers, the chief executive of Argos, said, “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.”
He said new processes had now been introduced, following an internal enquiry.
“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.”
Among those who will be given refunds are 12,000 staff who currently work at Argos.
They will receive payments on 28 February.