‘Wage theft’ is a term used when speaking about the proposed criminalisation of deliberate and systematic under payment of wages. Employers are legally required to pay workers according to the provisions of the Fair Work Act, applicable Modern Award or by the organisation’s Enterprise Agreement.
Last week in Adelaide, a crash repair business was instructed, by the Federal Circuit and Family Court, to pay his worker accrued but untaken annual leave entitlements. This amount initially totalling $1,000, increased to over $20,000 as the employer’s non-compliance resulted in fines and further penalties on top of the original amount.
In this instance, the Judge found that the compliance notice issued by the Fair Work Ombudsman was ‘entirely disregarded’ and there was a need to impose penalties to deter others from similar conduct.
At the other end of the spectrum, two Australian universities collectively owed almost $10 m to thousands of their staff. Both universities self-reported and entered into an enforceable undertaking with the Fair Work Ombudsman. These individual underpayments ranged from $1 to $65,000, with the scale of the errors revealed following an audit initiated by casual worker enquiries and national coverage of underpayments in the higher education sector.
In one case, the underpayments were the result of deficiencies in the payroll system. In the other, the university misapplied minimum engagement periods for casuals, lacked guidelines to ensure consistency in the application of academic casual pay rates, and lacked controls to identify timesheet entries inconsistent with the terms of the Enterprise Agreement.
Pleasingly, both universities have committed to complete back-pay to all workers concerned and implement robust measures to ensure ongoing future compliance.
You cannot afford to get it wrong, contact the South Australian Business Chamber on (08) 8300 0000 (select 1) for advice on avoiding costly underpayments.
