Furniture and appliance retailer Smiths City will pay all of its staff at least the living wage from October.
Around half of the company's 591 staff on the shop floor, distribution centres and head office will benefit from the move to an hourly rate of $20.55.
Smiths City chief executive Roy Campbell said the company had been looking at a change in policy since the beginning of the year, and it has committed to pay a "fair day's wage for a fair day's work".
"Our people should not come to work worrying about whether they have enough to put food on the table, pay the rent and the power bill and meet their basic needs."
Staff would also be allowed to use accrued sick leave to take an extra day off.
He said the changes were to celebrate staff who kept it in business for 100 years.
The company was criticised earlier this year for not paying staff for daily 15-minute-long sales meetings for six years.
In May, the Employment Court ordered Smiths City to pay all staff affected by the unpaid meetings.
Mr Campbell said its decision to pay staff the living was divorced from the court order and it was not an attempt to better its reputation as an employer.
"While some may look across it and see it that way, it's not connected at all."
He said the increased wage costs had been factored into its financial planning and would not alter the company's financial results.
First Union, which represents retail workers, and the Living Wage Movement said Smiths City's move was an example to other retailers, and further evidence that big retail did not have to mean low wages.
"Smiths City are yet another company demonstrating that paying good wages makes good business sense," National Living Wage Convenor Annie Newman said.
"Many profitable retailers in Aotearoa could give their staff pay rises that would significantly improve their lives without significantly affecting the bottom line."