Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Woolworths (ASX:WOW) share price drops on wages legal action

The Woolworths Group Ltd (ASX: WOW) share price is down on news of legal action because of its wages underpayment issues.

What’s going on?

According to reporting by the Australian Financial Review, the Fair Work Ombudsman has launched legal action against Woolworths for underpaying salaried managers. The total backpay amount could now increase to beyond $400 million.

The AFR reported that the regulator is seeking around $713,000 of outstanding backpayments to 70 in-store salaried managers underpaid $1.17 million from 2018 to 2019. It also wants Woolworths to adopt its methodology for calculating all other underpayments of salaried managers.

In the FY21 half-year result, Woolworths said that it had made further progress on salaried team member remediation with $228 million paid in the half.

The AFR said that whilst Woolworths had reached a total cost of $390 million for the remediation, some managers and class action lawyers alleged that Woolworths wasn’t looking at actual hours worked, with some estimates pinning its real backpay bill at $620 million.

Today’s news is that the Fair Work Ombudsman is now making a similar argument with how Woolworths has applied overtime penalties like weekend and public holiday penalty rates, meal allowances and annual leave loading.

The FWO also alleges that Woolworths “failed to make or keep records which specified the overtime hours the salaried managers worked or detailed the loadings, penalty rates or allowances application for those hours.”

The underpayments allegedly range from $289 to $85,905 during the 12-month timeframe.

FWO’s Sandra Parker said: “This court action highlights that large employers face serious consequences if they do not prioritise workplace law compliance among other aspects of their business.”

Is the Woolworths share price an opportunity?

Woolworths shares are currently valued at around 28 times the estimated earnings for the 2021 financial year, according to CommSec. I think that’s pretty pricey for a business that is only going to be growing earnings by single digits over the next few years.

There are other ASX dividend shares that might be worthy options to think about.

Are you stuck wondering where to invest right now? Have you got cash 'sitting on the sidelines'? Are you looking for dividend income AND growth but don't know where to start? Rask's expert ASX analyst team has just released a full report, detailing where we'd invest $10,000 right now.

Not only are we offering these 11 investment ideas completely FREE, we've also released an in-depth podcast to go with the report!

So, whether you have $2,000 or $50,000, our brand new analyst report could help transform your watchlist. Right now, you can get the full analyst report emailed to you for FREE by CLICKING HERE NOW or simply entering your email below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Are you stuck wondering where to invest right now? Have you got cash 'sitting on the sidelines'? Are you looking for dividend income AND growth but don't know where to start? Rask's expert ASX analyst team has just released a full report, detailing where we'd invest $10,000 right now.

Not only are we offering these 11 investment ideas completely FREE, we've also released an in-depth podcast to go with the report!

So, whether you have $2,000 or $50,000, our brand new analyst report could help transform your watchlist. Right now, you can get the full analyst report emailed to you for FREE by CLICKING HERE NOW.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Rask Analyst’s $10,000 Hypothetical Portfolio 

Rask Australia’s expert analysts have just released 11 stock & ETF positions they’d buy right now as part of a $10,000 hypothetical portfolio. 

Completely free, this report comes with the exact ticker codes, how much the analysts would invest and a detailed over the company and why we like it. Plus a 60-min podcast! 

Simply enter your email address and we’ll send you the report.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.