On 18 July 2019, celebrity chef George Calombaris was hit with a $200,000 fine for underpaying $7.83 million in wages to over 500 current and former employees. Industrial Relations Minister Christian Porter, who is also the Attorney General, has described the fine as a “light” penalty.

This month in Western Australia, a Han’s Café franchisee in Mandurah has entered into a court-enforceable undertaking to back-pay 16 workers $27,086 and overhaul its workplace policies, following an investigation by the Fair Work Ombudsman.

Unfortunately, underpayments are common in the fast food, restaurant and café sector. Young employees or migrant workers who are unaware of their workplace rights are the most affected.

The Fair Work Ombudsman is cracking down on businesses and employers that underpay their staff. Some companies have begun self-reporting in an effort to minimise any penalties. 

Earlier this year, the Super Retail Group announced it had underpaid workers $32 million over the past 6 years, as it failed to properly apply overtime rates. Similarly, in July 2019, Michael Hill publically announced it had inadvertently underpaid workers by $25 million over the past six years.

The maximum penalty that the FWO can impose on a company breaching workplace laws is $630,000 per contravention. The worst offenders may soon face criminal penalties for exploiting workers. Prime Minister Scott Morrison announced in July that “right now, the Attorney-General is drafting laws to deal with criminalising worker exploitation”.

To avoid hefty penalties, employers MUST ensure that their HR and payroll processes are compliant.

If you are an employer or an employee and have questions relating to underpaid wages, please do not hesitate to contact Havilah Legal on (08) 9221 2339 or book an appointment online at https://contact.havilahlegal.com.au/.

Janine Speirs is a Senior Associate at Havilah Legal and is experienced in Employment law.


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