‘Overconfident’ employers caught underpaying staff

‘Overconfident’ employers caught underpaying staff

Business owners becoming ‘overconfident’ in their awareness of employment rules are being blamed for a number of wage underpayment cases.

“Business operators can become overconfident and as we have seen, this can lead to mistakes like forgetting to pass increases applied in the annual wage review or paying your workers at the incorrect level within the modern award,” said acting Fair Work Ombudsman Kristen Hannah.

The warning for business owners to check their compliance with award rates and employee classifications comes as three SMEs in Victoria’s Gippsland region have been found to have collectively underpaid workers by almost $22,000.

And it is not always penalty rates for overtime, weekend and public holiday work that catch employers out.

The Ombudsman found that a café had inadvertently underpaid six employees by incorrectly classifying them, meaning their wages fell short of the restaurant industry award.

Meanwhile, a second business failed to increase wage rates for 13 employees following the annual award increase in July. While the change was as little as 47 cents per hour, that quickly added up to a shortfall of $6,027.

In the third instance, an auto servicing business underpaid two workers – one a casual labourer and the other a full-time clerical worker – on their ordinary hourly rates under the respective awards.

“While these mistakes may be careless rather than malicious, the fact remains that there has never been more freely available information for employers than there is right now, so there are no excuses for making these mistakes,” Ms Hannah said.

My Business has previously published an overview of the definition of a casual worker, given that this is often a point of uncertainty for employers.

‘Overconfident’ employers caught underpaying staff
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