Workers at 10 Argos stores in Edinburgh, the Lothians and Fife are to each receive part of a £2.4m payout after it emerged they were paid beneath the minimum wage.
Sainsbury’s, which took over the high street chain six months ago, said the workers had been paid below the national living wage and will now receive an average of £64 each.
This related to the timings of 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.
John Rogers, chief executive of Argos, said in a letter to staff that new processes had been introduced to ensure there can be no repeat of the issue.
The announcement came after the Government named and shamed 360 businesses for underpaying thousands of workers a total of almost £1 million.
The biggest ever list of offenders included employers in hairdressing, retail, hospitality and care homes.
Excuses for underpaying workers included using tips to top up pay, docking wages to pay for Christmas parties, and making staff pay for their own uniforms.