Fashion giant Zara has revealed it has underpaid its staff by $2.6 million, a report from the Sydney Morning Herald indicates.
Based on its local accounts filed with the corporate regulator, SMH reports that the underpayment impacted Zara's in-store staff.
According to the accounts, the retailer had engaged a specialist to review in-store staff pay, looking at both payments owed under the retail award and also "other monetary entitlements."
The Spanish retailer joins a list of Australian businesses who have underpaid their staff in recent years, including Woolworths, Michael Hill, Super Retail Group, Sunglass Hut, M.J Bale, Wesfarmers, David Jones and Country Road Group.
The news comes as retail industry groups welcome the $134 million deregulation agenda announced in the 2021 Federal Budget, which will work to streamline wage compliance.
The investment follows the string of underpayment scandals that plagued the retail industry, especially in 2019 and 2020.
"Most people outside the sector think we’re exaggerating when we say that since 2013 retailers have had to deal with nearly 14,000 different rates of pay depending on variables such as whether the employee is casual or permanent, their age, their classification and the times at which the work is performed," National Retail Association CEO Dominique Lamb said.
"This number easily doubles if you consider shift workers, baking production employees, apprentices and those working under the supported wage system.
"The NRA applauds the Federal Government for recognising the complexity of the system, and taking steps to improve compliance," she said.
Alongside the underpayments, SMH reported that Zara's revenue grew 4.8% to $326 million for the 12 months to January 31, 2020.
Profits for the same period also grew 7.5% to $12.9 million.
According to the report, the business is looking to reduce costs and may borrow money from parent Inditex, to continue operating in the Australian market.
Zara operates 19 stores in Australia.