Businesses in Australia are becoming subject to an increasing focus on incidents of wage theft. The Fair Work Amendment (Protecting Vulnerable Workers) Act of 2017 has introduced significantly higher penalties for a range of contraventions. Fines of up to $630,000 for a company and $126,000 for an individual now apply in relation to matters that involve serious breaches of workplace laws.
More recently Victoria’s Labor Government has promised to introduce laws targeting employers who underpay their workers, with penalties of up to 10 years in jail. The proposed laws would also introduce fines of almost $200,000 for individuals and almost $1 million for companies that deliberately withhold wages, fail to pay superannuation or other entitlements, or do not keep proper employment records.
What has been the impact of this attention?
Already we are seeing a number of prosecutions by the Fair Work Ombudsman resulting in significant fines. In Adelaide a total of $130,000 in penalties was awarded against the operators of a nail salon for exploiting two young, migrant workers and creating false records to try to cover it up.
In Sydney penalties of almost $100,000 have been applied against a former Caltex franchisee for falsifying wage records whilst a Pizza Hut franchisee on the Gold Coast was penalised a total of $216,700 after admitting to contravening sham contracting laws by misrepresenting to a delivery driver that he was an independent contractor, not an employee.
In Melbourne a surprise night time visit to the MCG by Fair Work Ombudsman inspectors to investigate exploitation of overseas workers by the venue’s contracted cleaning supplier resulted in a $132,217 penalty against the Australian arm of a global cleaning company. The penalty was the result of the Fair Work Ombudsman taking legal action after its investigation discovered eleven overseas workers were underpaid for cleaning work at the MCG.
Not that the penalties need necessarily extend only to fines. In Queensland a business operator was sentenced to a 12 month jail term (and then released subject to appeal) for contravening a freezing order placed on the company’s accounts following a finding that the company had underpaid five back-packers on working holiday visas.
Is my business at risk?
The message from the Fair Work Ombudsman is clear that the lawful obligation of a business to pay minimum rates applies to all employees in Australia, including migrant workers. Furthermore, a reverse onus of proof can also now apply, meaning that employers who don’t meet record keeping or pay slip obligations may need to disprove any allegations of underpayment made in a court.
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