Star Entertainment Concedes Staff Underpayment, Will Pay $9M in Back Wages

Posted on: February 8, 2022, 08:47h. 

Last updated on: February 8, 2022, 10:51h.

Star Entertainment says a review of its employee compensation structure has determined inadequacies for some workers. As a result, the publicly traded Australian casino group will pay approximately AU$13 million (US$9.27 million) in back wages, interest, and retirement fund contributions.

Star Entertainment Australia casino BOOT
Casino workers exit The Star Sydney after their shifts. The casino’s parent company, Star Entertainment, says it hasn’t paid some workers correctly over the past six years. (Image: Gold Coast Bulletin)

Star Entertainment is the second-largest casino operator in Australia, behind Crown Resorts. The Star Sydney, Gold Coast, and Treasury Casino owner and operator explains that roughly 2,200 salaried team members were found to not be “better off overall” as a result of their compensation arrangements.

We apologize to any team member impacted by the payment shortfall and we are committed to doing the right thing by acting transparently. Our priority is to address this issue and to ensure that it doesn’t happen again,” said Star Entertainment CEO Matt Baker.

Australia’s Fair Work Commission requires public companies to regularly complete “better off overall tests” (BOOTs) to determine if pay contracts for workers are in the employee’s best interests. The law essentially governs enterprise bargaining agreements.

BOOT implementation is regulated and administered by the Fair Work Ombudsman and United Workers Union.

BOOT Payment Adjustments

Star officials say the pay shortfalls date back to 2016. However, the casino operator explains that the underpayments represent just 0.4 percent of the AU$3.3 billion (US$2.35 billion) the company has paid its workforce during the six-year period.

The casino group cited overtime as the leading culprit for the compensation shortcomings. Star is improving its payment processes and systems to ensure salaried team members’ “pay is correct moving forward.”

Star says the AU$13 million expense will extend the group’s first-half 2022 net loss to between AU$73-75 million. The company cited ongoing business interruptions caused by COVID-19 and the delta and omicron variants for the financial losses.

However, Star says the pandemic is beginning to ease its negative impact on business, and operations continue to “progressively improve.”

Star Entertainment is the latest major corporation in Australia to realize its worker shortcomings through the BOOT program. Notable large employers that have issued similar notices in recent years include the Commonwealth Bank, Qantas, Coles, Woolworths, Wesfarmers, Qantas, and the Australian Broadcasting Corporation.

Financial Irregularities

Along with admitting it underpaid 2,200 workers, Star Entertainment remains under heightened scrutiny by the New South Wales Independent Liquor & Gaming Authority (ILGA). The gaming regulator last year launched a probe into claims that Star has enabled suspected money launderings at its Sydney casino.

Complaints have also been levied that Star Sydney has allowed high rollers who have known relationships with organized crime to patronize its casino. The ILGA will launch public hearings on the matter beginning next month. The agency’s end goal is to determine whether Star remains suitable to hold a gaming license in the Aussie state.

Star has denied allegations that it has looked the other way when it comes to combating suspected money launderers and other bad actors.