The supplement has been paid to certain members of staff in the South East of England for many years to compensate for the higher cost of living near London.
Thousands of Asda workers could be made redundant if they do not accept a pay cut, the GMB Union has said.
The big four supermarket chain is considering ending the 60p bonus paid to some workers in the South East of England.
The supplement is paid to these members of staff over many years to compensate for the higher cost of living near London.
However, Asda now says the extra payment is “out of line with the wider retail market”.
The big chain also noted that this means some employees in stores close to each other are paid differently.
The union also claimed that employees would be threatened with dismissal if they refused to accept the cuts.
Alongside this, the GMB says Asda is looking to reduce the overnight allowance in November.
A GMB Union spokesman said: “Pay cuts to staff during the cost of living crisis are disgraceful. And threatening them with fire and rehire tactics is inexcusable.”
Asda told the Mirror it is still consulting with staff at the 39 stores based outside the M25 about this and nothing has yet been decided.
The supermarket chain said the consultation was announced back in February alongside its announcement of a 10% pay rise for staff.
An Asda spokesman told the Mirror: “We are conducting collective consultation in a small number of stores outside the M25 where colleagues are currently paid a legacy location supplement of 60p an hour on top of their existing rate of £11.00 an hour.
“This addition is out of line with the wider retail market and has created an anomaly where some Asda colleagues in stores that are close together are being paid different rates.
“As part of this consultation, we are discussing a compensatory payment for colleagues in return for the removal of this location supplement if the proposal is approved.
“These discussions are ongoing and no final decision has been made.”
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