David Jones has been forced to repaid millions to thousands of its employees, under an enforceable undertaking with the Fair Work Ombudsman.

David Jones underpaid roughly 2,800 employees a total of around $480,000 in wages, plus $1.4m in superannuation to about 6,100 employees, between April 2014 and September 2020.

It is ordered to pay back the $1.88 million, plus total interest of around $60,000 by April.

David Jones has also agreed to make a $130,000 “contrition payment” to the commonwealth, on top of the repayments, which have been largely completed.

The department store giant self-reported the underpayments in September 2020, after parent company Woolworths Holdings discovered broad underpayments across its entire retail portfolio.

Woolworths Holdings sold David Jones late last year.

Politix, part of the Country Road Group still owned by Woolworths Holdings, also underpaid $2.06 million in wages, and $45,000 in superannuation.

Woolworths Holdings blamed the error on “failures in manual payroll processes; payroll system set-up errors; annual salaries insufficient to cover all General Retail Industry Award 2010 entitlements; and the failure to compensate training and classification secondments”.

Fair Work Ombudsman Sandra Parker said: “Under their enforceable undertakings, David Jones and Politix have committed to implementing stringent measures to improve compliance and protect the rights of their employees.

“These measures include commissioning, at the companies’ own cost, independent annual audits to check their compliance with workplace laws over the next two years.

“This matter is another reminder to employers to place a high priority on ensuring their staff receive all their lawful entitlements.

“Insufficient annualised salaries have become a persistent problem in many Australian workplaces, and breaches – if not quickly found and fixed – can lead to a substantial back-payment bill.”