By Zaynab Aly

It’s hard to know which numbers are more staggering.

When the Fair Work Ombudsman (FWO) looked at reports of underpaid workers in Sydney’s food precincts recently, it found the following shocking figures:

  • $239,505 in wages were owed.
  • 333 workers had been underpaid.
  • 77 per cent of businesses investigated were found to have breached FWO rules.
  • The big picture: it was all part of a nationwide program that has recovered more than $2 million for workers.

The latest scandal involving underpayment of Australian workers was revealed when Fair Work Inspectors investigated 49 businesses across Sydney districts Haymarket, Chinatown, Darling Harbour, Barangaroo, Surry Hills, and Darlinghurst.

The FWO Ombudsman’s investigation was part of a larger national program looking at businesses in the food industry, which has recovered more than $2 million in wages for workers so far.

Of the 47 completed investigations in Sydney, 31 businesses had underpaid workers, and 22 had failed to meet recordkeeping or pay slip requirements. Across the investigation, the most consistent issues were not paying the minimum hourly rate and failing to pay penalty rates.

Use HR Assured’s workflow software to guide your decisions when paying employees; don’t get fined or named and shamed

The scandal is a loud reminder that the FWO can investigate workplace complaints, and if they find breaches, have a range of tools at hand to bring justice. Where employees have concerns about underpayment, including underpayment of penalties, overtime, entitlements, and wages, they can bring these concerns to the Ombudsman’s attention for investigation. A substantiated claim can go back six years – or longer if a Court orders it.

Employers need to watch pay rates now that the minimum wage has risen

This investigation resulted in many infringement notices and fines issued to businesses. While these may not seem as serious as litigation, the consequences can be serious: further fines may be issued against a business or even an individual personally and court proceedings may be bought against the business and individual where such infringement notices are not complied with. With the new changes to pay secrecy laws, it’s likely going to be much easier for employees to discover any pay discrepancies.

Now that the National Minimum wage has increased to $23.23 per hour from 1 July 2023, this article is an important reminder for you to review employees’ pay to ensure that they are being paid no less than the National Minimum wage or relevant award minimum rates and penalty payments.

What does a compliant pay slip look like?

Although pay slip recordkeeping is often overlooked, it’s a crucial aspect of compliance. To start with, employees must be provided with a pay slip within one working day of payment. That pay slip needs to have key information such as:

  • the date of payment and payment period;
  • gross/net pay;
  • rate of pay;
  • the number of hours worked at that rate of pay; and
  • whether there were penalties, loadings, or allowances owed to that employee.

It also needs to have descriptive information for that employee including:

Pay slips are a form of employee records, and when these aren’t maintained properly, it can lead to your business receiving fines and penalties. In addition, if an employee makes an underpayment claim and you have not maintained appropriate records which can be relied upon to disprove the claim, the underpayment claim will be accepted. The best way to ensure you are in the best position possible to defeat an underpayment claim is to keep accurate pay records.

For clients of HR Assured, guidance on wages, entitlements and pay slips can be found within HR Assured’s Knowledge Base.

Use the compliance systems we’ve set up to keep you safe from oversights that could cost your business more than just money

Running a healthy business should always be your priority. HR Assured was designed to assist with just that. How? Because HR Assured offers workflows reminding you of what data you need to store, templates to help you work out what should be in your pay slips, and a Knowledge Base to answer your questions – plus access to 24/7 HR expertise over the phone.

If you would like assistance in understanding how minimum wages work, auditing, calculating pay rates, and assistance with implementing an appropriate strategy, please contact our workplace relations experts via our 24/7 Telephone Advisory Service.

Not an HR Assured client? To learn more about how HR Assured can help your business, please contact us here.

Zaynab Aly is a Senior Workplace Relations Consultant at HR Assured. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.