Under-fire retailer Sports Direct International has pledged to pay its employees above the national minimum wage from today, in a move which will cost the firm £10 million.
The group, which is based in Derbyshire and controlled by Newcastle United FC billionaire owner Mike Ashley, said it will apply to casual workers as well as all of its directly employed staff.
It comes after the company faced allegations from the Guardian newspaper earlier this month about low wages, and claims that it forces compulsory unpaid 15-minute searches of staff as they leave, while also docking wages for clocking in just one minute late.
The probe prompted condemnation from the Unite union, which called the atmosphere at Sports Direct "gulag working conditions".
But Unite said Mr Ashley needed to make further reforms, or else this sole move would be seen as a public relations stunt designed to distract attention from the firm's "Victorian work practices".
Unite regional officer Luke Primarolo said:
Senior Labour MP Chuka Umunna described the retailer, which runs around 400 stores across the UK, as a "bad advert for British business".
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.
The Guardian sent undercover reporters to work at Sports Direct's warehouse in Shirebrook, Derbyshire, last month and alleged that the group is so concerned about potential theft that it even asks staff to roll up their trouser legs and show the top of their underwear as part of compulsory searches.
The investigation also said staff are harangued by a public address system for not working fast enough.
Earlier this month Sports Direct posted half-year results showing a 3.6% rise in underlying pre-tax profits to £166.4 million for the six months to October 25.
This latest controversy follows a storm of protest from trade unions over staff treatment at the group's annual shareholder meeting in September, when claims over staff searches first emerged.