Underpayments bill balloons to record $148 million last year   
The Age.
October 20, 2021


Australia’s wages watchdog recouped almost $150 million for workers in the last financial year, a record figure five times greater than the $30 million it recovered three years earlier and an indication employees are being underpaid on a grand scale.   

The Fair Work Ombudsman’s annual report published on Wednesday presents a roll call of companies that underpaid staff, from large publicly listed corporations such as Woolworths to cleaning firms, fruit and vegetable farms and cafes.

Ombudsman Sandra Parker is grappling with a wave of underpayments.


Ten universities are under investigation for potentially underpaying workers too, with the higher education sector now the focus of a new strategy to address pay problems after issues at institutions such as the University of Sydney and the University of Melbourne.

In a speech delivered a week before the publication of the report, Ombudsman Sandra Parker acknowledged pay laws can be complex to navigate. “However, our experience is that underpayments are avoidable when companies invest and prioritise compliance with workplace laws, as they do with other aspects of their business,” Ms Parker said.

Against the $148,374,054 that Fair Work recovered for workers in the 2020-21 financial year, it secured $2,857,501 in court-ordered penalties, though time lags mean one is not a proportion of the other. It launched 76 cases last year, compared to 54 the year before and 23 two years back.

RELATED ARTICLE
Nearly half of those polled said they would be more likely to vote for a party that promised to restore Sunday rates if they were lowered as a result of the Fair Work decision.

Wage scandal
Underpayment as business model: what is wage theft?
Two broad categories of underpayment emerge in the ombudsman’s report.

One is mainly large employers that made some attempt to comply with their pay obligations, often by paying a flat annual wage, but failed to pay enough to cover the hours or tasks their employees were really required to do. Many of these cases are inadvertent.

“All employers, especially large corporate entities, must place a much higher priority on investing in payroll and workplace relations systems and expertise to ensure they are paying workers their lawful entitlements,” Ms Parker said.

Then there are other, often smaller, businesses that showed a “blatant disregard of the law” and exploited often vulnerable workers, such as migrants who struggle to speak English or who are afraid of having their visa status exposed.

In those more extreme cases, the ombudsman is more likely to go court, as well as in others where there are systemic problems. Otherwise, Ms Parker said, the ombudsman was aiming to work with employers who self-report issues and repay their staff to avoid litigation and encourage them to come forward.