H&M is among 37 companies that have been named and shamed by the government for failing to pay the national minimum wage in the UK.
It is the biggest list of companies to be exposed by the Department for Business, Skills and Innovation.
H&M failed to pay £2,604.87 to 540 workers, which it said was due to a problem with time logging. The Swedish fast fashion retailer apologised and said all arrears have now been processed.
The national minimum wage for adults aged 21 and over is £6.50 per hour, for those aged between 18 and 20 it is £5.13 per hour and for 16 to 17-year olds it is £3.79 per hour. The apprentice rate is £2.73.
Business Minister Jo Swinson said: ‘If employers break the law they need to know that we will take tough action by naming, shaming and fining them as well as helping workers recover the hundreds of thousands of pounds that are owed to them.’
H&M employs more than 9,500 people in the UK and the average underpayment for those affected was £4.82, said the company in a statement.
It comes as the HM Revenue and Customs (HMRC) National Minimum Wage enforcement budget will be increased by a further £3m in the financial year 2015 to 2016, taking the total to £12.2m.
The extra money will go towards increasing the number of HMRC compliance officers to identify companies that pay below the national minimum wage.
The government is hoping to push through a Small Business Enterprise and Employment Bill which will increase the level of fines of up to £20,000 and will be based on each underpaid worker rather than per employee.