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Wage mistakes leave SMEs with huge repayment bills

Adam Zuchetti
Adam Zuchetti
23 August 2017 1 minute readShare
Bills payment, money, receipts

Complaints to the Fair Work Ombudsman are highlighting a growing problem of employers unintentionally underpaying workers, simply by not knowing their legal obligations.

Three Queensland businesses have collectively paid back more than $50,000 in employee entitlements to three workers found to have been underpaid – apparently with no malice or deliberate intention on the employer’s behalf.

In one instance, a full-time trainee investment advisor was employed on a commission-only arrangement. However, as the Fair Work Ombudsman (FWO) points out, the Surfers Paradise-based employee was entitled to a minimum salary of $22.86 per hour under the Banking, Finance and Insurance Award.

The employer, once notified of the breach by the FWO, paid the employee back to the tune of $28,000.

In another instance, a retail worker on a 457 visa was employed in Main Beach on a contract that only provided two weeks’ annual leave.

Over the eight-year period he was employed, the employee was underpaid by $16,131 in annual leave and leave loading entitlements, as well as a laundry allowance.

The employer, according to the FWO, was unaware that all employees are required to receive the equivalent of at least four weeks’ annual leave per year.

A further $8,000 was back-paid to a customer service representative who regularly worked five hours overtime each week.

“In each of these cases, it was the first time the business had come to our attention and each business promptly co-operated to rectify the mistakes,” Ombudsman Natalie James said.

“However, business operators should be warned that repeated mistakes or cases of deliberate exploitation could result in litigation and potential court penalties in addition to a large repayment bill.”


Wage mistakes leave SMEs with huge repayment bills
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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