FROM time to time we see regrettable reports in the media about the underpayment and exploitation of workers in the Illawarra
Some more recent shocking examples have revealed the exploitation of workers on 457 visas.
Employers in the Illawarra are rightly appalled at the stories we are seeing and wonder how it could ever happen.
With workforce shortages across many key sectors including construction, aged and disability care, transport and logistics and mining, we want to encourage migrants and refugees to join our community.
Conversely, we cannot afford to allow our reputation as a great place to work to be damaged; particularly when our experience is that businesses genuinely want to do the right thing and pay their staff accordingly.
The truth is that without diligence and, in many cases, professional advice, this could happen to any business.
In some cases allegations point to exploitative and coercive behaviour on the part of the employer.
However, even a well-meaning business can inadvertently make mistakes in the payment of its workers, and in the eyes of the law, ignorance is no excuse.
We understand that many employers can find the industrial relations system confusing and complex, but ongoing audits by the Fair Work Ombudsman are a warning that there is a huge cost to getting things wrong.
For a start, fair work legislation can impose substantial penalties on employers of up to $63,000 for businesses, and $12,600 for individuals.
And it doesn’t end there: the federal circuit court recently handed down a penalty of $161,760 earlier in the year to a sushi outlet operator in Shellharbour in a clear case of deliberate exploitation of staff.
With workforce shortages across many key sectors including construction, aged and disability care, transport and logistics and mining, we want to encourage migrants and refugees to join our community. Conversely, we cannot afford to allow our reputation as a great place to work to be damaged.
At the other end of the spectrum, a Wollongong-based telecommunications company was penalised over $3000 last month, having underpaid a worker’s casual loadings, overtime rates and penalty rates, mistakenly applying rates from an expired state Award.
Accepting the Ombudsman’s findings, they will be subject to an independent audit and other remediating actions. Instances such as these are ones that the Chamber is eager to help businesses avoid.
A company in Unanderra joined up shortly after receiving an underpayment claim and being contacted by the Fair Work Ombudsman. Our lawyers worked with them to evaluate the underpayment and also provide assistance moving forward on the appropriate rates.
They continue to receive ongoing advice about classifying employees and penalty rates from and call when engaging new employees to make sure they have the correct arrangements in place from the outset.
The Chamber is acutely aware that many businesses are uncertain when it comes to correct pay and applicable awards.
We find that confusion surrounds employers’ determinations of the applicable awards that cover their employees, and how to classify employees using the levels in an award.
While seemingly clear cut, some businesses are not on top of working out penalty rates and overtime, as well as how casual loading applies. This is critical for businesses with shift workers.
Another trend we are seeing is more and more questions being asked concerning determination of wage rates, in particular for trainees and apprentices.
To those employers who are deliberately underpaying their workers, reports coming to the fore through the media should serve as a warning – don’t let this be you.
To those who are not confident that they are paying their employees correctly, or would benefit from business advice, I strongly encourage you to get in touch with either the Fair Work Commission or the Illawarra Business Chamber for advice or guidance.
There is a significant amount of information available to assist employers in identifying the right entitlements and payments for workers.
The risk of being caught underpaying workers can cause untold reputational damage to a business, because aside from being illegal it is a practice the community simply will not accept.
Adam Zarth is the Executive Director of the Illawarra Business Chamber