Sports Direct and Primark have been named and shamed by the Government for failing to pay the minimum wage after identifying 260 companies that had to refund £1.7m to thousands of workers.

Primark was listed as the third-biggest offender after it deducted shop worker’s uniforms from their salaries, resulting in them earning less than the minimum wage. Primark was forced to pay back £231,973 to 9,735 employees.

The low-cost fashion retailer said that following "a routine audit" from HM Revenue and Customs it had identified the error and the average amount paid per employee was £23.75. A Primark spokesman said: “The company is committed to the National Minimum Wage and has apologised to the employees concerned.  It has also reviewed its procedures in order to avoid this situation re-occurring.”

Meanwhile, Sports Direct has had to hand back £167,036 to 383 workers while its staffing agencies, Best Connection and Transline, topped the shame list for underpaying employees. Best Connection was found to have underpaid £469,273 to 2,558 workers and Transline failed to pay £310,302 to 1,421 workers.

The two agencies were hauled before MPs last year as part of an inquiry into the mistreatment of staff at Sports Direct’s Shirebrook warehouse.

It was found that Transline had deducted money from low-paid workers without proper explanation or justification while warehouse workers were not being paid the minimum hourly wage because of lengthy security searches as they filed in and out of the building.

In June last year Mr Ashley admitted to MPs that staff were being paid less than the minimum wage because of the retailer’s lengthy search processes. Since then the company has attempted to overhaul its work practices, such as reducing the amount of searches, offering guaranteed hours and scrapping a “six strikes” policy.

A Sports Direct spokesman said: “This matter relates to the historical situation in our warehouse that was widely publicised in 2016, for which we apologised at the time. We cooperated fully with HMRC to make back payments to Sports Direct staff who were affected. We are committed to treating all our people with dignity and respect, and we pay above the National Minimum Wage."

At a glance | Sports Direct reviews working practices

Since 2013, the Government's has identified £8m in back pay for 58,000 workers, with 1,500 employers fined a total of £5m. This year the Government will spend a record £25.3m on minimum wage enforcement.

Business Minister Margot James said: "There is no excuse for not paying staff the wages they're entitled to and the government will come down hard on businesses that break the rules.

“That’s why today we are naming hundreds of employers who have been short changing their workers; and to ensure there are consequences for their wallets as well as their reputation, we’ve levied millions in back pay and fines.”