Starbucks Coffee Australia Pty Ltd has entered into an enforceable undertaking with the Fair Work Ombudsman after back-paying more than $4.5 million to staff in Sydney, Melbourne, Brisbane, and the Gold Coast.

The underpayments were a result of the company failing to pay part-time staff the correct overtime, with Starbucks self-reporting the underpayments to FWO in 2020 after a review of its time, attendance, and payroll systems.

Ultimately, Starbucks failed to comply with the award-requirement to have written agreements in place specifying the regular workdays and hours that made up each part-time employee’s ‘ordinary hours’ of work.

Staff working at 52 Starbucks locations were affected, with roles varying from baristas and supervisors to assistant managers and individual underpayments ranging from $20 to $18,574.

The enforceable undertaking now requires Starbucks to provide the Fair Work Ombudsman of its completed back payments by the end of September.

The company must also make a $150,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund, provide evidence of new systems and processes that ensure future compliance, and issue apologies to affected staff.

“Starbucks has committed to implementing stringent measures to ensure workers are paid correctly,” says Fair Work Ombudsman Anna Booth.

“These measures include engaging, at the company’s own cost, audits of its compliance with workplace laws over the next two years.

“This matter demonstrates how important it is for employers to place a high priority on their workplace obligations.

“For Starbucks, a failure to have written agreements in place for part-time staff and a set-and-forget approach to paying some full-time staff on annual salaries resulted in significant underpayments and rectification costs.”