Underpayments are still a thing

… $240,000 fine issued in late Feb.

Author: Eric Allgood CMgr FIML CAHRI MAITD

As businesses start to believe everything about their business is either slowing or stopping, February brought a timely reminder that this just is not completely true. Staff underpayments, or ‘wage theft’ as those who like to put their own slant on things call it, was described last year as ‘an epidemic’!

Surely, during an ACTUAL pandemic, the Fair Work Commission (FWC) will be easing up on these investigations and pick them back up where they left off after the dust settles?!

Nope, not happening, in fact given the current work climate, I would strongly suggest the number of complaints are going to significantly increase. The FWC has confirmed that whilst investigations may take longer, they certainly are not letting up.

In a media release on 26 March 2020, the Fair Work Ombudsman stated, “We will continue to utilise our full suite of enforcement tools to hold employers to account and any workers with concerns should contact us.

This was illustrated with clarity in February this year when a Federal Court Circuit decision saw a company fined $200,000 and its sole director fined $40,000. The intriguing thing with this case is that the fines are to be paid, along with the underpayments (totaling only $8,088), to the underpaid employee.

Whilst the reason for such was the behaviour of the employer and their failure to attend court or take any other steps to defend the claim.

This is on the back of Sandra Parker, the Fair Work Ombudsman (FWO) stating that she shall be using her newly increase powers to prioritise going after businesses that are underpaying workers. In a recent statement Parker noted that nearly half of the 1217 businesses audited nationwide failed in their workplace basics, with underpayments being an issue in 70% (approximately 400 businesses). Parker went on the mention that nearly three quarters of these non-complaint businesses claimed to be unaware of the rules and she emphasized that this is not an excuse.

The FWO has the power to compel records from an employer where an employee has lodged an underpayment complaint. If found deficient, the FWO can issue a penalty infringement notice/s and inspectors may, if there is a ‘reasonable belief’ an underpayment has occurred, issue a compliance notice. Employers will need to meet the cost of having their underpayments verified by experts.

Furthermore, Christian Porter, the Attorney General has stated that new penalties (via legislation) have been mooted such as criminal penalties, significantly higher financial penalties and further increases to the FWO’s powers.

My advice do your own audit before one is enforced upon you.