Professional services company hit with $40k fine over failure to back pay worker

A Perth-based professional services company and its former director have been smacked with $39,600 in penalties through the Fair Work Ombudsman.

AICA International and its former sole director and shareholder, Shiju Mathews, have been hit with $39,600 in total penalties in the Federal Circuit and Family Court after failing to follow a compliance notice.

The Perth, Bibra Lake-based company operated in a number of professional services industries, including legal, accounting, education, marketing and information technology, copping a $33,000 penalty from the court. Mathews himself was hit with a $6,600 penalty for being directly involved in the contravention.

The compliance notice was issued to the company back in May 2023 after the Fair Work Ombudsman investigated potential contraventions after receiving a request for assistance from an affected worker.

It was found by the FWO that an employee who resided with the company between February 2018 and July 2022 was underpaid minimum wages owed under the Professional Employees Award 2020 – with Mathews found to have been involved in the underpayment.

The FWO issued the compliance notice requiring the company to back pay the full-time system and computer engineer.

In addition to the penalties for not complying with the notice, the court has ordered AICA International to pay the affected worker $2,654, plus interest and superannuation, as required by the compliance notice.

Speaking on companies who either ignore or fail to act on FWO-issued compliance notices, Fair Work Ombudsman Anna Booth made it clear for non-compliant employers that they will not only face penalties but also be forced to reinforce the affected workers on top.

“When compliance notices are not followed, we are prepared to take legal action to ensure workers receive their lawful entitlements,” said Booth.

“Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”

With the criminalisation of wage theft coming into effect back on 1 January 2025, employers must be sure that their payroll systems are in line.

“The introduction of criminal penalties for intentional wage theft marks a significant shift in employer accountability,” said Warwick Ryan, member of Hicksons’ workplace relations, employment and safety team.

“Employers who intentionally underpay staff can face criminal charges, including significant fines and up to 10 years’ imprisonment. Civil penalties for underpayments have also increased substantially.”

According to Ryan, employers should review strategies to mitigate the risks of wage underpayment. This includes:

• Conducting a thorough audit of employee pay and entitlements.
• Ensuring payroll systems are up to date and compliant with awards, enterprise agreements, and minimum wage requirements.
• Provide training for managers and payroll staff on the relevant employee minimum entitlements to prevent any errors.
• For small businesses, review the Voluntary Small Business Wage Compliance Code (Code) and consider further steps recommended in the Code that can be adopted.