More than 2400 Starbucks workers backpaid $4.57 million

Starbucks has backpaid $4.57m to more than 2450 workers and made a $150,000 contrition payment after admitting to under­paying the workers for six years.

Starbucks has backpaid $4.57m to more than 2450 workers and made a $150,000 contrition payment after admitting to under­paying the workers for six years. Picture: AAP Image/Mick Tsikas

Starbucks has backpaid $4.57m to more than 2450 workers and made a $150,000 contrition payment after admitting to under­paying the workers for six years.

The ASX 100 company failed to pay the often young part-time staff, including baristas, super­visors and assistant managers, the correct overtime pay.

The underpayments affected 2457 current and former staff working in 52 stores in Sydney, Melbourne, Brisbane and the Gold Coast from 2014 to 2020.

Under an enforceable undertaking reached with the Fair Work Ombudsman, Starbucks has agreed to pay $4.34m in wages and entitlements, more than $180,000 in interest and more than $40,000 in super­annuation to the workers,

Individual back-payments range from $20 to $18,574. The average back-payment is $1883.

The FWO said Starbucks self-reported its non-compliance in 2020 after becoming aware of underpayments while conducting a review of its time and ­attendance and payroll systems.

Starbucks failed to comply with an award requirement to have written agreements in place specifying the regular work days and hours that made up each part-time employee’s “ordinary hours” of work. This led to the company often failing to recognise when part-time employees were entitled to be paid overtime entitlements. Some part-time employees were also underpaid annual leave and public holiday entitlements.

A smaller number of full-time store managers were underpaid due to Starbucks paying them annual salaries that were insufficient to cover their minimum award entitlements, given the significant amounts of overtime and weekend work they performed.

Fair Work Ombudsman Anna Booth said an enforceable undertaking was appropriate ­because Starbucks had co-operated and demonstrated a strong commitment to rectifying underpayments, including devoting significant resources to engaging independent experts to oversee its rectification.

“Under the enforceable undertaking, Starbucks has committed to implementing stringent measures to ensure workers are paid correctly. These measures include engaging, at the company’s own cost, audits of its compliance with workplace laws over the next two years,” Ms Booth said.

Starbucks must make a $150,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.