The Shangri-La Hotel in Sydney has admitted it underpaid staff an estimated $250,000 in wages after a review found employees had not received full entitlements to penalty rates and overtime.
The admission comes on the same day that jewellery chain Michael Hill also confessed it had underpaid its staff by as much as $25 million over the last six years.
The hotel said it “sincerely apologises and deeply regrets” that it had failed to pay staff correctly, a statement from the Shangri-La read.
The hotel’s general manager Philippe Kronberg said the underpayments were unacceptable and the hotel was taking steps to ensure it does not happen again.
The Fair Work Ombudsman first contacted the hotel about reports of underpayment. The hotel reviewed its pay records and found 22 staff had been affected.
“Our staff work incredibly hard and are very committed to their profession and it is our responsibility to ensure that they are paid as they should be,” Mr Kronberg said.
“We have spoken to current and former staff who have been impacted and made a commitment to pay them as soon as the reconciliation process is complete.
“We have explained to current staff the changes we have made to the payroll system, including monthly audits, fortnightly reconciliations, and ensuring compliance through education.”
It is the latest company to confess to making payroll errors. Earlier this year, Beaurepaires Australia discovered it had in correctly paid its workerssince 2010, resulting in close to $2 million in underpayments.
In recent years, there have been a string of underpayment scandals, particularly in the $170 billion franchising industry. Companies including convenience store giant 7-Eleven, Caltex, Domino’s Pizza, Pizza Hut, Retail Food Group – which includes brands such as Brumby’s, Michel’s Patisserie and Donut King – and bubble tea operator Chatime have all been caught underpaying workers Super Retail Group, Qantas and the ABC have also been found to be underpaying their staff.
The Fair Work Ombudsman has flagged tougher enforcement of workplace laws, including greater use of compliance notices to address underpayments.
Former Fair Work ombudsman Natalie James recently told an Australian Industry Group industrial relations conference that it is not only small businesses and franchise networks being called out for the underpayment of workers.
Ms James, now with Deloitte’s Workplace Integrity practice, said companies – often with their own enterprise agreements, union presence and “supposedly sophisticated” payroll systems and expertise – are now emerging as culprits, with underpayments running into millions of dollars. And mistakes have remained embedded in the systems for years without detection.
The Fair Work Ombudsman said it is conducting an investigation in relation to The Shangri-La Hotel in Sydney.
“As this matter is ongoing, it is not appropriate to comment further at this time,” a spokesman said.