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Surprise FWO audit reveals 80% compliance failure rate

Adrian Flores
Adrian Flores
06 April 2021 1 minute readShare
compliance failure rate

An unannounced audit of Hobart’s “cheap eats” food precincts has found that almost four out of five businesses targeted failed to comply with workplace laws.

Fair Work Inspectors targeted 45 businesses at North Hobart, Salamanca/Battery Point and Constitution Dock in Tasmania.

Of the 35 businesses in breach, 32 had underpaid their workers and 24 had failed to meet payslip and record-keeping requirements.

The most commonly found breaches were failures to pay minimum wages (27 businesses), followed by failure to pay casual loading (21 businesses).

In response to the breaches, the FWO issued 34 compliance notices, recovering $582,450 for 376 workers. There were also 22 infringement notices issued, resulting in $30,030 in fines paid.

Businesses back-paid 376 employees, with amounts ranging from $868 for three workers at a business in the Constitution Dock area to $150,905 for 55 employees in the North Hobart area.

The FWO said it commenced legal action against one café employer, Welvin & Kevin Pty Ltd, company director Mr Zhi Zhi Tan and company majority shareholder and manager Mr Qingxiang (Kevin) Meng for allegedly failing to comply with a Compliance Notice that required it to calculate and back-pay any underpayments.

It is also alleged that the company failed to make and keep employee records and that Mr Meng was allegedly involved in that breach, with four of the employees being young workers and one was on a visa.

Further, the FWO said litigation is also being considered in relation to another business, while all other non-compliant businesses were advised that any future breaches may lead to higher-level enforcement action.

Fair Work Ombudsman Sandra Parker said the unannounced audits were part of a national program that also targeted cheap eat precincts in Melbourne, Brisbane, Sydney, Adelaide and Perth.

“Our intelligence-led activities have hit food precincts around the country because they commonly employ a high proportion of young and migrant workers who can be vulnerable to exploitation,” Ms Parker said.

“Protecting vulnerable workers such as students and visa holders and improving compliance in the fast food, restaurants and cafés sector are ongoing priorities for the Fair Work Ombudsman.”

Surprise FWO audit reveals 80% compliance failure rate
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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