Retailer Sports Direct International has said it will pay its employees above the national minimum wage from 1st January, in a move which will cost the firm £10 million.
Based in Shirebrook, Derbyshire, and controlled by Newcastle United FC billionaire owner Mike Ashley, the group said the pay change will apply to casual workers as well as all of its directly employed staff.
The move follows allegations from The Guardian newspaper about claims Sports Direct forces unpaid 15-minute searches of staff as they leave, while also docking wages for clocking in just one minute late.
These allegations have been condemned by Unite union which said Mr Ashley would need to make further reforms or the move would be merely seen as a publicity stunt.
Unite regional officer Luke Primarolo said: “If Mike Ashely is to fulfil his promise of making Sports Direct a model employer then he needs to commit Sports Direct to becoming a living wage employer and stamp out abusive work practices by putting all staff on permanent contracts.
“Otherwise he risks accusations of engaging in yet another PR stunt and a continued loss of confidence among customers and investors alike.”
Business Minister Nick Boles said HM Revenue and Customs (HMRC) could take enforcement action over the non-payment of the national minimum wage at the business.
A spokesman for Sports Direct said the extra costs included national insurance contributions and the wage rise was not a payment in arrears for any salary shortfall in the past.
The pay rise means staff aged over 21 will get an increase from £6.70 per hour to £6.85, while those aged between 18 and 20 will collect £5.45 per hour instead of £5.30.
The 15p premium will also take effect for over-25s when the “national living wage” of £7.20 is introduced in April, meaning they will be paid £7.35.