Lush Australia underpays 5,000 workers due to outdated processes Lush Australia underpays 5,000 workers due to outdated processes

Lush Australia underpays 5,000 workers due to outdated processes
30 Jul 2018

Cosmetics company Lush Australia has admitted it may have underpaid up to 5,000 current and former staff as much as AUS$2 million ($US1.47 million) and has launched a payback scheme as a result.

Lush Australia director Peta Granger said the issue stemmed from the company’s reliance on manual pay processes and its failure to adopt suitable software as it grew. 

"What has become alarmingly clear to us at Lush Australia is that our internal payroll systems have not kept pace with our growth. In recent months, we have unearthed some serious miscalculations of people’s pay," she told SBS.

The company should have had “far more respect for our people's pay and upgraded our payroll infrastructure to keep up with the growth of our business", she added.

Lush said the issue mostly involved part-time workers, some of whom may be owed up to AUS$10,000 (US$7,369) in back pay. The issue affects employees from 2010 onwards. 

Granger confirmed that Lush's payroll office had failed to pay overtime when part-time staff worked an extra day. It had also not paid extra when employees were unable to take a 12-hour break between shifts.

"Knowing what we know now, it was irresponsible to imagine that such a manual and outdated system could possibly work on a business our size," she said. "I want to be absolutely clear we would never knowingly underpay our staff. It is not deliberate and goes against everything we value and believe in at Lush."

But the Australian Payroll Association said it was not surprised that another major company had underpaid staff. Chief executive Tracy Angwin told AAP: "Employers need to take responsibility for their payroll departments - which they are not doing. 

Lush said it was now investing AUS$1.5 million (US$1.1 million) in a new payroll system, which will result in about 200,000 timesheets dating back to 2010 being manually entered for transparency purposes. Recalculated wages will be paid to staff by December 2018.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Cosmetics company Lush Australia has admitted it may have underpaid up to 5,000 current and former staff as much as AUS$2 million ($US1.47 million) and has launched a payback scheme as a result.

Lush Australia director Peta Granger said the issue stemmed from the company’s reliance on manual pay processes and its failure to adopt suitable software as it grew. 

"What has become alarmingly clear to us at Lush Australia is that our internal payroll systems have not kept pace with our growth. In recent months, we have unearthed some serious miscalculations of people’s pay," she told SBS.

The company should have had “far more respect for our people's pay and upgraded our payroll infrastructure to keep up with the growth of our business", she added.

Lush said the issue mostly involved part-time workers, some of whom may be owed up to AUS$10,000 (US$7,369) in back pay. The issue affects employees from 2010 onwards. 

Granger confirmed that Lush's payroll office had failed to pay overtime when part-time staff worked an extra day. It had also not paid extra when employees were unable to take a 12-hour break between shifts.

"Knowing what we know now, it was irresponsible to imagine that such a manual and outdated system could possibly work on a business our size," she said. "I want to be absolutely clear we would never knowingly underpay our staff. It is not deliberate and goes against everything we value and believe in at Lush."

But the Australian Payroll Association said it was not surprised that another major company had underpaid staff. Chief executive Tracy Angwin told AAP: "Employers need to take responsibility for their payroll departments - which they are not doing. 

Lush said it was now investing AUS$1.5 million (US$1.1 million) in a new payroll system, which will result in about 200,000 timesheets dating back to 2010 being manually entered for transparency purposes. Recalculated wages will be paid to staff by December 2018.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER ARTICLES THAT MAY INTEREST YOU

Australian Red Cross admits underpaying thousands of workers

Number of whistleblowing reports on UK's minimum wage doubled last year

New Zealand Government sets up taskforce to tackle staff underpayment

 

 

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