Woolworths Group Ltd (ASX: WOW) is facing a fresh investigation from the Fair Work Ombudsman after the company admitted it underpaid employees.
Woolworths shares closed the session at $35.68 today, a 1.36% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.62% today.
Let's take a look at what the company revealed today.
Image source: Getty Images
Woolworths in focus
Woolworths has discovered $144 million worth of staff underpayments as part of a payroll review. The supermarket giant revealed the discrepancy in its half-year results today.
The Fair Work Ombudsman (FWO) will launch an investigation into the underpayments, The Australian reported today. This is on top of the legal action the ombudsman launched against the company in June 2021.
In its half-yearly results presentation on Wednesday, CEO Brad Banducci apologised for the findings. He said:
We are disappointed to have identified further inadvertent underpayments and unreservedly apologise to our affected team members.
We will continue to fix issues when we identify them and introduce the right controls to prevent them from happening again.
This latest discovery takes the total underpayments to employees to at least $571 million, after a separate review uncovered underpayments of $427 million.
The payroll investigation is ongoing with 85% of Woolworths staff reviewed to date. The company hopes to complete the process by the end of 2022.
As covered by the Motley Fool earlier, Woolworths reported a 6.5% drop in net profit in its half-year results today. However, group sales were up 8% on H1 FY21.
The company's performance was impacted by the COVID-19 pandemic. Despite strong sales growth, Woolworths reported COVID cost the company $239 million.
Woolworths declared a fully-franked interim dividend of 39 cents per share, down 26.4% on the prior corresponding period.
Woolworths share price snapshot
The Woolworths share price has risen 3% in the past year but is down 6% year to date. In the past week, it has gained 4%.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.
Woolworths has a market capitalisation of about $43 billion based on its current share price.
