Nationwide audit finds one in four businesses underpaid staff

Fair Work inspectors issued 457 contravention letters, 56 formal cautions, 24 infringement notices with $32,980 in cumulative penalties and 47 compliance notices that recouped $469,390 for 530 employees. One cafe was hit with an enforceable undertaking to repay its employees.

The remaining money was repaid after employers were informed they had payment issues without any formal warning or sanction.

Fair Work launched its nationwide audit campaign in 2018 after a raft of underpayment scandals. Ombudsman Sandra Parker said an alarming percentage of employees were ignorant of the law.

“Nearly three-quarters of employers that breached the law said they weren’t aware of the rules, which is not an excuse,” Ms Parker said. “Businesses are failing the basic requirements of being a responsible employer if they are not carrying out adequate due diligence before hiring.”

Accommodation and food services businesses had by far the highest rate of non-compliance among those audited at 61 per cent, followed by retail and administration and support services, both at 47 per cent.


Wes Lambert, chief executive of the Restaurant and Catering Association, said the figures suggested businesses were being baffled by the complexity of the award system that governs employee pay and conditions.

“If they’re making that many mistakes at that small a value, maybe it’s time to make the awards less complex,” Mr Lambert said.

He questioned whether the Fair Work Ombudsman was “using their resources correctly” in auditing so many businesses to find only $1.3 million in missing wages.

That is not the message drawn by the union movement. Australian Council of Trade Unions secretary Sally McManus said wage theft was costing working people $1.35 billion a year, according to a report from consultancy firm PwC.


“That the FWO has only been able to find such a small amount shows why unions need the power to do spot checks of wage records and make sure that workers are being paid, records are properly kept and dodgy bosses don’t get an unfair advantage over employers doing the right thing,” Ms McManus said.

Manufacturing, public safety and administration and construction rounded out the top six industries by non-compliance with workplace obligations, according to the report. More than three out of 10 businesses in each sector were not treating their employees properly.

The problems identified by the ombudsman included failures to keep proper records, pay penalty rates, issue pay slips or giving employees the correct hourly rate.

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