By Matthew Robinson

Woolworths have just announced that it may have underpaid its staff around $200M to $300M – the largest underpayment in recent history. They join a growing list of brands like Wesfarmers, Michael Hill, 7-Eleven, Chatime, Rockpool Group and George Calombaris, who’ve been underpaying workers, sometimes for years.

Underpayment issues aren’t just a small-business problem or limited to a few industries like hospitality and retail: they’re common across businesses of all sizes and all industries.

This latest case is sure to bring significant adverse publicity that will severely damage the Woolworths brand and share price as regulators start to explore questions like “how”, “why” and “how much”.

As case after case of underpayments hit the headlines, some with staggering numbers attached, we wonder: who’s next?

Could it be your business?

There’s obviously more to the Woolworths matter, but from the initial information released it appears to stem from a common misconception of designating employees as covered by an “annual salary”.

We’ve seen this as a consistent theme for underpayments across a range of industries – where employees are paid a salary whilst covered by an industrial instrument but directed to work a pattern of hours for which their “salary” is too low to meet all their entitlements under the Award.

Large-scale underpayments have been so consistently unearthed in the media that it raises the question: why aren’t auditors picking them up?

The answer is simple: in our experience, it’s because most auditors don’t check a business’ payroll compliance with industrial relations requirements. Why not? Because it’s a dark art and requires specialist skills.

Could you be underpaying your staff?

Ask yourself:

  • Are you confident that your business knows precisely what Awards or Enterprise Agreements apply to all its staff?
  • If you deploy salaries to your staff, are you confident that your staff are being paid appropriately to comply with any Award or Enterprise Agreement, and that you have the right contracts in place?
  • When was the last time your business had an audit (even sample audit) for compliance with their Award or Enterprise Agreement obligations?
  • Are you confident your business has the sufficient skills to identify and report any non-compliance with their Award or Enterprise Agreement obligations?
  • Do you have a whistle-blower line set up so shopfront staff can report to management any concerns over pay?

If the answer to any of these is ‘no’ or ‘I’m not sure’ then you might have a problem and should seek professional advice.

The worst thing you can do is to do nothing.

Fortunately, there are ways to mitigate the damage and even have underpayment investigations protected by legal privilege, allowing you the chance to sort out any issues before they become front-page news, damage your business and your brand, expose you to fines and (if the Government has its way) criminal prosecution.

We know this because finding and fixing underpayments with minimal fuss and no headlines is what we do. We’ve developed a comprehensive range of underpayment auditing tools and technology to handle everything from low-level audits to major investigations, such as our award-winning and highly sophisticated PayCheck* system. We can tell you if you’ve been underpaying staff, by exactly how much (to the cent), and for exactly how long (going back years) whether you have ten employees or ten thousand.

We also do this at, literally, a fraction of the cost of traditional forensic accounting and legal services.

And because we’re a law firm, our findings are protected by legal privilege and we can work with your business to cure the systems causing the errors.

We’ve sorted out underpayment issues for many major clients who are household names (for what they sell and do and not for underpaying their staff). Our focus is on finding and fixing any problems quickly, so you can pay what is due to your employees (and ex-employees) and stay out of the media spotlight.

If you think you might have an underpayment problem, or just want the peace of mind that comes with knowing you don’t, get in touch and we can talk about next steps.

Matthew Robinson is a partner and solicitor with FCB Workplace Law. He’s an accredited specialist in workplace law in NSW and has been advising clients on industrial relations and employment matters for over fifteen years.

* Winner of the 2017 Lexis Nexis award for Legal Innovation