Lush Australia Has Admitted Underpaying Staff By $2M Over The Past 8 Years

Lush Cosmetics has admitted serious failures of procedure stretching back 8 years, resulting in employees being underpaid a total of around $2 million.

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The stunning admission today comes on top of the announcement of a scheme to pay back employees money owed through withheld or underpaid wages.

Internal investigations at Lush revealed more than 5,000 employees of the company – both retail and manufacturing – were underpaid by their employer due to what Lush officials assert was a “serious payroll failure” dating back to 2010.

Lush Australia director Peta Granger issued a statement this morning apologising deeply for the missteps, issuing a vow to reconnect with every employee – both past and present – affected by the underpayments, regardless of how nominal the amounts may be.

We are deeply sorry to our valued staff and customers that we’ve failed to uphold the values that we have always believed in and the high standards that we’ve always sought to achieve.

This resulted from a very serious failure on our part to upgrade our internal systems. We 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. 

We would never knowingly under pay. This was not deliberate. It goes against everything we value and believe in, and we are so sorry to have let our staff down in this way.

The issue was raised by team members last August, and by December the company had determined it had breached three separate areas of the Retail Award.

The underpayments, according to Lush officials, stem from inefficiencies in the 2010 transition to the Fair Work Act’s “modern awards” system, which contains incredibly complex systems of payment based on workers ages, employment status, and shift times.

Granger asserted that the company is committed to repaying every cent owed to employees, no matter what the amount, with payments forecast to be paid from December onwards.

Whether it’s $1 or $1000, we are committed to connecting with every employee who’s been affected by our mistake.

To meet this commitment, we’ve invested $1.5 million for external payroll experts to build a system onto which 200,000 handwritten paper timesheets will be scanned, indexed and entered so that the last eight years of payroll can be re-run accurately.

This process will give all employees full transparency of their work history, how their entitlements have been calculated and if any back payment is owed to them.

This is a complex process, and realistically it will take the rest of this year to get it right.  We are confident, however, that back payments including interest will begin to be paid by December.

Former staff employed by Lush in the period since 2010 are urged to register their details for the backpay scheme via a dedicated website set up by company officials.

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