Employers could have jail time over underpayments
Prime Minister Scott Morrison has put employers on notice that those who exploit workers may soon face criminal penalties.
“Right now, the Attorney-General is drafting laws to deal with criminalising worker exploitation,” Mr Morrison confirmed during parliamentary question time on Wednesday.
As celebrity chefs George Calombaris and Neil Perry deal with the fallout of underpayment scandals, Australia’s leading workplace relations consultancy is advising employers to be vigilant around how they pay their staff.
The call comes after Calombaris was hit with a $7.8m underpayment bill, while Perry is facing legal action for the alleged underpayment of a chef.
Senior employment relations adviser at Employsure, Michael Wilkinson hit back at the announcement.
“It doesn’t make sense — why create fear in the business community?” he asked.
According to Mr Wilkinson, wage underpayment is an undeniable problem across the country, but that investigation into the causes is needed rather than heaping more regulation, compliance, and punishment onto employers.
“Before we label an entire section of Australia’s economy as bosses intent on ripping off their staff, can we perhaps examine a deeper reason why employers might be struggling to pay their staff correctly?” he said.
“While systematic underpayment is a serious matter, it’s honest errors and a lack of understanding of entitlements that puts smaller hospitality businesses at risk,” Wilkinson said. “Yet ignorance is not an excuse in the eyes of the FWO, which will pursue cases of underpayment in an attempt to reclaim any unpaid wages.
“It’s no secret that we have one of the most complex workplace relations systems in the world, and hospitality employers are especially prone to making wage errors,” he said. “Between casuals, part-time and full-time workers, along with rising minimum wages, various penalty rates and Award entitlements, it’s a merry-go-round and they can find it hard to navigate.
“Thirty percent of calls from our clients in this sector will relate to basic employee entitlements, so it’s clearly an area where they struggle.
“The FWO will be targeting fast-food, restaurants and cafes as part of its compliance and enforcement action over the coming 12 months. This is certainly a cautionary tale for all employers in the sector.
“It’s incredibly easy for employees to tip-off and report cases of underpayment. With the attention being placed on the sector, it’s a wake-up call for employers to be confident that they are compliant with the entitlements of their staff.”
