Get it right. No shortcuts in paying employees.
Important recent update – Fair Work introduced a 3.5% minimum wage increase in the 2018 Annual Wage Review, effective as of 1 July 2018. Read more here.
Now more than ever the Fair Work Ombudsman (FWO) is cracking down on employers who are underpaying their workers. Australia’s complex employment laws impose many obligations upon employers when it comes to paying employees. It is therefore vital for employers to be well informed in order to avoid the severe legal consequences.
Illustrated in a recent article by Adam Zuchetti for My Business, a former operator of a suburban burger bar has been burned by penalties worth more than $300,000, with the Ombudsman citing it as a wake-up call to all hospitality businesses to lift their game on wage compliance.
Todd Patrick Buzza, the former owner of two Burger Buzz outlets in Melbourne, was fined $51,735 and his company Rum Runner Trading copped a $258,495 fine after a judge found them guilty of “blatant” and “extraordinary” conduct towards employees.
The penalties arise after two separate actions were launched by the Fair Work Ombudsman (FWO) – one for the underpayment of seven workers to the tune of $7,113, and a second after a further five employees were found to have been shortchanged by $7,513.
Most of the impacted workers were university students or foreign visitors on working holiday visas.
The FWO alleged that further underpayments were likely but that “they could not be quantified because [Mr] Buzza and his company contravened record-keeping laws, including knowingly providing inspectors with false and misleading records”.
Handing down her verdict in the Federal Circuit Court, Judge Suzanne Jones criticised Mr Buzza and his company for demonstrating “a blatant disregard for their obligations”, and that “no genuine contrition or remorse” had been shown.
Judge Jones admitted that the penalties handed down included a component of deterring other business owners from breaking the law in a similar fashion.
“A penalty should be fixed with a view to ensuring that it is not regarded by the respondents and others ‘as an acceptable cost of doing business’, and should be likely to act as a deterrent to like-minded persons or organisations,” she said.
“Employers should be in no doubt that they carry a responsibility to ensure that they comply with the obligations which they owe to their employees under the law.”
Commenting on the verdict, Fair Work Ombudsman Natalie James said that hospitality businesses are vastly over-represented in complaints the FWO receives about wage underpayment.
“It is deplorable that nearly one-third of the most serious cases that end up in court involve this one sector,” Ms James said.
“The Fair Work Ombudsman’s experience and data suggests that a disturbing culture of non-compliance has emerged in the restaurant, cafe and fast food sector that is completely unacceptable,” she said.
According to Ms James, hospitality workers make up 7.2 per cent of the total labour market, yet food businesses account for 29 per cent of all FWO legal cases.
“Unless industry leaders take action to overhaul a culture where underpayment of wages has become normalised, this sector and its individual businesses will increasingly attract the attention of law makers and find itself in the middle of media storms,” Ms James said.
She added: “We appreciate workplace laws can seem complex but there has never been more freely available information to help employers understand their obligations, and there is no excuse for failing to check what lawful minimum pay rates apply.”
Got questions? If you are unsure if you’re meeting these legal requirements, are seeking advice or after peace of mind we suggest you contact Employsure directly for more information on 1300 651 415 or visit https://employsure.com.au/
Source: Article Written by Adam Zuchetti, MyBusiness Issue (14 May 2018)