Employers on notice after workers underpaid $27 million

Employers are being urged to review their wage obligations, after the Fair Work Ombudsman revealed Australian workers were underpaid a whopping $27 million in 2010.

According to the Ombudsman, Australian workers were underpaid $26.7 million last year, although back-pay was recovered for more than 17,000 employees.

“Typically, about half the complainants who come to us are found to have been underpaid,” Ombudsman Nicholas Wilson said.

According to Wilson, around three quarters of the underpayments were for amounts less than $3,000. He is believed to be trialling the expanded use of mediation for low-level underpayment claims.

The Ombudsman recovered most for NSW workers, with a combined total of $8.2 million going to 4,182 employees, while 3,556 Victorian workers received a combined total of $7.5 million.

More than $1.5 million was recovered for 1,480 workers in WA and 1,048 workers in South Australia, while 1,186 Tasmanian workers received a combined total of $858,767.

But it was Queensland that had the highest number of underpaid workers, with 5,142 employers receiving a combined $6.082 million in back-pay.

Wilson said when Fair Work inspectors indentify a problem and contact a business, most employers check their records, realise the error and fix it immediately.

According to a spokesperson for the Ombudsman, the highest numbers of complaints come from within the accommodation and tourism industry, retail, and hair and beauty.

The news comes three months after it was revealed one in four takeaway businesses in Queensland were guilty of underpaying their workers.

An audit of 129 businesses across Queensland, following complaints from food court workers, revealed takeaway businesses are among the worst offenders with regard to underpaying staff.

According to Wilson, around 30% of the takeaway businesses that were audited were in breach of workplace laws.

Around the same time, it was revealed approximately two thirds of the hotels and restaurants operating around Victoria’s Mornington Peninsular were in breach of workplace laws.

Of the 35 businesses that were inspected, 20 were found to have contravened laws, mostly from failing to pay correct wages or loadings and allowances.

In September, the Ombudsman launched PayCheck Plus, an online tool enabling employers to check their wage obligations by calculating minimum rates of pay per hour, per shift or per week.

PayCheck Plus also takes into account overtime payments, penalty rates and allowances.

Wilson said small business owners, regardless of the industry they operate in, need to familiarise themselves with the new tool to avoid breaching workplace laws.

“We would be encouraging employers to find out about their obligations,” Wilson said.

This article first appeared on StartupSmart.