The current wage underpayment compliance climate has claimed its latest culprit… the Star Entertainment Group Limited (Star Casino) who has announced it will spend approximately $13 million (plus interest) to repay around 2200 workers it found were underpaid over a six-year period. This underpayment case reiterates the importance of conducting regular audits of company payments to its employees… or else face the consequences.
Review of Wages Discovered Underpayments
The Star Casino said it identified the underpayment of wages following a six-year retrospective wage review.
Approximately 2200 workers were on annualised salaries underpinned by a modern award during the review period. The review found that in some cases salaried team members were found not to be “better off overall” as their annual salary did not sufficiently compensate them for their equivalent award entitlements such as overtime and penalty rates.
The Fair Work Ombudsman and the United Workers Union have been notified of the underpayments and it is not clear yet whether further legal action or further penalties will be pursued against the Casino Operator.
Takeaway for Employers
This example and the countless of recent wage underpayment cases with the FWO recouping almost $150 million in wage underpayments for the 2020-21 financial year.
These examples demonstrate the important of conducting regular and systematic reviews of your payment and conditions of employees or otherwise face the consequences of massive reconciliation of underpaid monies to affected employees.
The narrative surrounding wage underpayment is generally accusations of big businesses ripping their employees off, however, we see many examples of the reality that wage underpayment is very often an inadvertent mistake of the employer.
That’s because the complexity of the legal documents that outline minimum pay rates and conditions of employment – known as awards – result in many employers unknowingly underpaying their workers. Employers often get caught out because their payroll systems were not designed to deal with the complexity of calculating overtime payments in Stevens & Associates now offers a fixed fee Compliance Audit to companies including a review of any and/or all documents such as payroll documentation, letters of appointment, and rostering arrangements of your workforce and finalise a report indicating areas requiring improvement, particularly with respect to wages and/or potential underpayment of wages.
Please contact Nick Stevens, Luke Maroney, Daphne Klianis or Josh Hoggett if you have any questions about a Compliance Audit or wish to commence one on behalf of your employer.