‘Unsavoury and difficult’: Instances of wage theft reach record highs

It took four years for Melbourne’s Antony Balmain to finally receive unpaid wages from his previous employer.

The media and communications professional had worked at the Red Cross, which applied the wrong award or enterprise agreement to employees and incorrectly classified employees, resulting in a range of minimum rates and entitlements.

“It was an unsavoury and difficult process that dragged on. The psychological challenges that come with having to deal with these matters can be tough,” Balmain says.

It took four years for Melbourne’s Antony Balmain to finally receive unpaid wages from his previous employer.

Now employed elsewhere, he’s keen to highlight the issue of wage underpayments in the hope that others in the same situation speak up. It is crucial to seek out free advice early on from Fair Work, a union or state organisations, he says.

Antony is by no means alone. Wage theft is rampant in Australia. But as the cost of everything from petrol, insurance and the mortgage steadily climbs, our wages need to stretch further than ever before.

Estimates suggest that Australians are collectively underpaid a staggering $1.35 billion a year. Sectors most at risk include construction, healthcare and social assistance, accommodation and food services and retail. Younger workers are more likely to be underpaid than other age groups.

The Fair Work Ombudsman recovered $532 million in unpaid wages and entitlements for more than 384,000 workers in 2021/22 – a record sum of back-paid wages and entitlements for a record number of employees.

This is three times higher than the previous year and benefitted five times the number of workers across the nation.

So far this year, Fair Work has commenced legal action against a consulting services company in Melbourne, a civil engineering company in Queensland, and a commercial laundry business has been fined $90,000 after underpaying 22 workers.

Super Retail Group is also alleged to have underpaid employees by more than $1 million across four subsidiaries.

Fair Work Ombudsman Sandra Parker.Credit:Jason South

Fair Work Ombudsman Sandra Parker says inadequate annual salaries for employees stretching across multiple years have become a persistent issue for businesses across many industries.

“Every employer should be clear that if annual salaries do not cover all minimum lawful entitlements for all hours actually worked, the results can be substantial back-payment bills, plus the risk of significant court-ordered penalties,” Parker says.

Breaches in the hospitality sector are rife, but awareness is growing thanks to high-profile cases in the media, managing director of Employee Matters Natasha Hawker says.

“Ultimately, it’s wage theft, and with many Australians doing it tough financially, this is making the problem even worse for employees,” Hawker says.

Employees should seek the correct advice to ensure they’re not relying on outdated information. “There’s also a level of complexity involved in meal breaks, overtime and shift allowances. But rates of pay can change regularly, so it’s worth checking if you’re entitled to back pay,” she says.

If you suspect you’re being underpaid, ask your payroll manager how they have calculated your rate of pay or call Fair Work to qualify your correct rate of pay.

“Most employers will want to resolve the situation and correct the situation. But if your complaint is ignored or denied, escalate the issue to a more senior person or call Fair Work to raise a formal complaint so they can help you recover your underpayment,” she says.

“From an employer’s perspective, the risk is that Fair Work may potentially complete a more detailed audit and resolve underpayments for other individuals. This may involve significant back pay corrections.”

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