Lush Underpaid Thousands Of Workers By Over $4 Million, Which Is Quite A Bit Of Backpay

Bath bomb boutique Lush has admitted to underpaying its workers by more than $4 million over the past decade, and is now in the process of issuing backpay.

On Tuesday, the company entered an Enforceable Undertaking with the Fair Work Ombudsman to pay 3,130 current and former employees a total of $4.4 million.

“Under the Enforceable Undertaking, Lush has committed to stringent measures to comply with the law and protect its workforce,” Fair Work Ombudsman Sandra Parker said in a statement.

“This includes engaging, at its own cost, an expert auditing firm to audit its compliance with workplace laws over the next three years.”

The affected workers include production assistants and compounders in the company’s Sydney factory as well as retail assistants, supervisors and managers in Lush stores around the country who worked between 2010 and 2018.

One of the reasons for the massive screwup was because the company didn’t have a proper HR department at the time, however there were also other issues like inadequate workplace relations systems and a lack of training in general.

Some of the affected employees were in Lush shops, while others were in the company’s factory. (Getty Images / John Keeble)

For all the trouble, Lush was slapped with a relatively small $60,000 penalty.

“For any sizeable business, a contrition payment of $60,000 is a rounding error,” United Workers Union executive director Godfrey Moase told Guardian Australia.

However Parker said the $60,000 sum was “appropriate” because Lush not only cooperated with the investigation but also “demonstrated a strong commitment to rectifying all underpayments”.

It was actually Lush itself that first self-reported the underpayments to the Ombudsman back in 2018.

Some of the employees were owed up to $10,000, the Sydney Morning Herald reported at the time.

However despite making things right on the pay front, things are still far from perfect at Lush.

Earlier this year a Guardian Australia investigation found overworked staff were being injured due to poor working conditions at the company’s factory.

The company since said it’s working to improve workplace safety and make it easier for staff to report any issues they have in the workplace.