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FWO recovers record $123m in unpaid wages; SMEs part of the problem

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
21 October 2020 2 minute readShare
unpaid wages

The FWO recovered over $123 million for 25,583 underpaid workers last financial year, with half of the claims relating to SMEs in the restaurant, café and fast-food sector.

The Fair Work Ombudsman’s 2019–20 annual report has revealed a record $123.5 million was recovered for underpaid workers across the country during the past financial year, including $90 million in underpayments that were self-reported by employers.

More than $56.8 million was back-paid following extensive investigations and enforceable undertakings negotiated with the FWO.

Fair Work Ombudsman Sandra Parker said most of the underpayments came from big businesses that failed to properly record hours worked, had old payroll systems, or didn’t apply enterprise agreements properly to the relevant awards.

“The prevalence and the scale of big corporations underpaying their workers is extremely disappointing and concerning. We have established a dedicated taskforce within the Fair Work Ombudsman to investigate these matters,” Ms Parker said.

“I strongly encourage the CEOs and boards of Australia’s largest corporations to ensure they are complying with workplace laws and to advise us immediately if they identify significant underpayments.”

However, small businesses, too, contributed their fair share to the total sum, with Employsure revealing that half of all claims came from SMEs in the restaurant, café and fast-food sector.

“Underpayment has always been a big issue, but now in the age of COVID-19, there is more pressure than ever being placed on businesses to correctly pay their staff,” said Employsure managing director Ed Mallett.
“We’re seeing these big companies with immense HR resources fail to get wages correct. What hope is there for small businesses who don’t have those extra resources at their disposal?”

The Australian government has talked about criminalising wage theft. In fact, in Queensland, employers found to be deliberately underpaying their staff could be jailed for up to 10 years, or fined almost $1 million, under new laws passed through State Parliament.
However, Mr Mallett expressed that small-business owners should not be characterised as thieves, and applauded recent talks between unions and employer groups which yielded a deal not to penalise employers who inadvertently underpay their workers.

Industrial Relations Minister Christian Porter is in the process of working on a bill of changes to the country’s IR system, which is expected to be revealed before the end of the year.
“We welcome any changes to the country’s complex IR system that make it easier and safer for SMEs to operate. These are hardworking people who have already lost so much this year from the COVID-19 pandemic. Unless there is change, business owners will always be at risk,” continued Mr Mallett.
“There are all manner of systems trying to catch underpayment, but very few that try to prevent it in the first place. Sometimes underpayment is deliberate, other times it is accidental — but whatever the cause, the outcome is the same: intense scrutiny and hefty fines from the Fair Work Ombudsman.”

While 2019–20 was a busy year for the FWO, Mr Parker revealed that during the course of this year, the ombudsman’s office has answered over 50,000 calls from employers and employees seeking COVID-related advice.

“Our efforts guiding businesses through the pandemic’s significant disruption to workplaces have been considerable and I am extremely proud of how the agency has responded. I encourage any affected employers and employees to contact us for free advice and assistance,” Ms Parker said.

But despite the FWO’s new COVID-related tasks, Ms Parker assured her office will continue to crack down on wrongdoers.

“We will continue our intelligence-led, priority-driven work targeting high-risk sectors and practices, protecting vulnerable workers and educating both employers and employees across Australian workplaces as they recover from the pandemic in the year ahead,” Ms Parker said.

FWO recovers record $123m in unpaid wages; SMEs part of the problem
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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