‘Employers are getting away with it’: Underpayments under spotlight

Business leaders and employees are urged to be vigilant following new information shedding light on increasing wage theft figures in Australia.

The warning comes after research released this month revealed wage theft is costing Aussie workers nearly $850 million. This follows similar studies published earlier this year which found Australians are working an average of six weeks unpaid overtime each year.

According to Slater and Gordon industrial and employment lawyer Aleks Ceklic, too many employers are failing to meet their obligations to employees, particularly on the pay front.

Mr Ceklic said the most common forms of underpayments or wage theft generally involved employers failing to provide entitlements to employees. Interestingly, he said the hospitality industry was the worst offender.

“There is always a risk of human error being involved. Underpayments can be unintentional and often occur due to a lack of understanding, but ignorance of the law is no excuse. Whether a company knew and intended to underpay its employees or not and if underpayment is happening. the company would be legally liable. Unfortunately, there are employers out there doing the wrong thing,” Mr Ceklic said.

“The problem is worse than we initially thought. It shouldn’t be on employees to check. It’s unfortunate it’s not the opposite but clearly employers are not checking and taking action to fix the situation themselves. We know that companies are quick to pick up overpayments. Businesses don’t always hold themselves to the same level of accountability when it comes to underpayments. They seem to be sweeping it under the rug.”

While the responsibility shouldn't fall on the employee to ensure they're being paid appropriately, Mr Ceklic said there are some things they can do to minimise their risk of being underpaid by their employer.

“It’s not right but it seems that most of the time the onus falls on the employee to pick the error up. The average employee might not know how to determine if their entitlements are being paid or even where to look,” he said.

“Wages can come from several different sources. You could be on a regular contract, an enterprise agreement or on an award. At times, the employer won’t have verbally told the worker and they don’t even know what their entitlements are.

“Most people sign it, put in a manilla [sic] folder in drawer and forget about it. The EA spells out the normal hours and overtime and when they should be receiving overtime, as well as their allowances. Check your entitlements to see what overtime and allowances you are owed.”

On the employer side, Mr Ceklic advised businesses to make sure their payroll teams are operating as effectively as they can be, with so many times underpayment errors coming down to people in payroll not knowing how to ensure their company was meeting their obligations.

“A tradesperson working at different sites, could be entitled to a specific allowance at each site. A plumber at a wastewater treatment plant could be owed $3 for working there as part of his contract. A first aid allowance might need to be paid to you if you are the first aid officer on site. There could be a remote site or car allowance owed to you. These are all common forms of entitlements that can become underpayments if not provided by the employer," he explained.

“Employers have been trusted by governments and their employees so they have been allowed to get away with it for too long. Wage theft often affects low-paid and migrant employees and it’s illegal.”

A report published by Professionals Australia earlier this year discussed what a reasonable expectation of overtime is. The report detailed how each industry differs, and generally, the more senior a role is, the more overtime may be expected.

Staff should refer to their award or agreement for information on overtime and not feel pressured to speak up if the overtime request is unreasonable. The Fair Work Ombudsman states that you are able to turn down overtime when:

• There are health and safety risks involved.
• You have responsibilities outside of work.
• You aren’t being paid in accordance with your agreement or award.
• You aren’t given notice.
• You have discussed the inability to work overtime in the past.