An Albion Park company has been fined $161,700 for hiring four workers as independent contractors, instead of employees.
Metro Northern Enterprises Pty Ltd, which sells homeware products, was fined in the Federal Circuit Court last Thursday for breaching contracting laws in relation to four sales workers.
The dodgy employment arrangement resulted in the workers being underpaid more than $10,000.
The three female workers and one man, aged in their 20s and 30s, promoted homeware products in the Illawarra between January and March 2010.
Metro Northern Enterprises classified the workers as independent contractors and paid them on a "commission-only" basis.
But the staff should have been classified as "employees" as they were required to attend work and perform duties, as directed by the company.
The incorrect classification led to the workers being underpaid minimum wage rates, overtime, a vehicle allowance and annual leave pay, totalling $10,327.
Judge Shenagh Barnes ordered the company to back-pay the workers in full.
Fair Work inspectors investigated the company when the workers lodged complaints after they resigned.
It lodged proceedings against the company in 2011.
Fair Work Ombudsman Natalie James said the court's decision sent a message that sham contracting would not be tolerated.
"There are serious consequences for business operators who recklessly or carelessly misclassify employees as contractors, leading to employees being denied basic workplace rights and entitlements," she said.
"Successful legal actions such as this also help other employers who are complying with workplace laws by ensuring a level playing field."
Metro Northern Enterprises Pty Ltd did not return the Mercury's call for comment.