Underpaid and overworked
Carly appeared on the Weekend Edition of Sky News to discuss the George Calombaris news he had underpaid his staff almost $8M and paid a $200,000 contrition payment. It was a great opportunity to discuss the problem of underpayment in Australia and what you can do if you are being underpaid.
What is underpayment?
Underpayment or wage theft is when you are paid less than your minimum entitlements. It is commonly experienced by the most vulnerable workers including those on visas, in cleaning and hospitality.
At law you are entitled to a minimum wage, penalties and overtime determined by the modern award or enterprise agreement that applies to the work you do and supplemented by your contract of employment. If you are not sure what your minimum entitlements are you can check here.
If your employer fails to pay your minimum entitlements in full and on time, you are entitled to recover the underpayment at law and claim interest for the late payment. You are even entitled to pursue a civil penalty for the breach which is up to $64,000 for a Company and $12,600 for an individual involved in the contravention.
Are the laws to prevent it tough enough?
Almost 2 years ago new legislation was introduced to protect vulnerable workers from, amongst other things, underpayment, wage theft and cash back schemes. The legislation doubled and in some cases tripled civil penalties to be applied to employers for breach. Despite this, we are not aware of a successful prosecution being brought under the new provisions. Rather, the Fair Work Ombudsman has preferred an approach of negotiating repayments with a “contrition payment” as in the George Calombaris case, which are substantially less than maximum penalties for breach.
The Federal Government has suggested criminalising wage theft to act as a deterrent. While we agree that wage theft should be treated as a crime, in the same way an employee would face criminal charges for stealing from their employer, what counts is enforcement of the law. If the law is not enforced, it won’t deter unscrupulous employers from either deliberately or with reckless indifference underpaying their workers.
How widespread is wage theft?
About half of the enquiries we get every day relate to wage theft, underpayment of minimum entitlements or failure to pay commissions or bonuses. The union movement sought to make the last election a referendum on worker wages with Bill Shorten promising to establish a new jurisdiction to make recovery of unpaid wages of up to $100,000 available through the Fair Work Commission. This would have been a brilliant initiative as the current system for recovery of wages requires an employee to go to Court which can be a costly and stressful exercise.
What can workers do if they are being underpaid?
If you are being underpaid this is what we recommend:
- Check your minimum entitlements here, print your pay summary and give a copy to your employer. Ask to be paid correctly against the pay summary.
- Record your hours of work, the Fair Work Ombudsman has a great app you can download and use. Being able to prove you worked the hours you say you did is critical to the success of an underpayment claim.
- If you have been underpaid, approach your employer quickly and ask for the problem to be fixed by the next pay cycle.
- If the problem is not fixed by the next pay cycle, you should formalise your complaint in a letter of demand. Here is a sample letter.
- If despite issuing the letter of demand your employer continues to underpay you, contact the Fair Work Ombudsman and request their assistance with a mediation to resolve your dispute.
- If the mediation is unsuccessful you can commence an underpayment claim either self-represented or with legal assistance. You have 6 years from the date of the underpayment to commence recovery proceedings.
If you have been underpaid at work and need our help please call 1800 RES 123 or contact us through our website. We are here to help.Underpaid at work what are my rights? #know your rights Click To Tweet