Various businesses such as retailers (including speciality grocery stores, mobile phone repair shops, butcher shops and bakeries, florists, and drycleaners), hair and beauty salons, beauty supply shops, and car wash businesses that engage vulnerable workers were assessed in Hobart, Adelaide, Melbourne, Sydney, Perth and Cairns – generally in each city’s central business district.

Businesses were selected for inspections based on contacts to the FWO, such as anonymous reports and enquiries, as well as where previous investigations into the business had been conducted by the FWO. Inspectors checked time and wage records, and employee payslips, to ensure that workers were being paid their correct wages and entitlements.

The inspections, which concluded last Friday, also involved inspectors ensuring workers had been provided the Fair Work Information Statement and Casual Employee Information Statement by their employer, as the law requires.

Acting Fair Work Ombudsman Michael Campbell said that the types of businesses targeted often engaged workers who can be vulnerable to exploitation.

“Workplace breaches that involve migrant workers and young workers can be particularly serious. We find these workers are often unaware of their workplace rights or unwilling to speak up if something seems wrong. It is crucial visa holders know that they have the same workplace rights as all other workers, and protections for visas exist if they call out workplace exploitation,” Campbell said.

The Ombudsman noted that a lack of records or poorly maintained records often indicated workplace breaches such as underpayments.

“Record-keeping is the bedrock of compliance and must be taken seriously,” Campbell said. “Fair Work Inspectors have handed out Infringement Notices – which are similar to on-the-spot fines – when employers were not meeting their legal obligations.”

Currently, Infringement Notices can be issued to an employer with a maximum of $1,878 per contravention for an individual and $9,390 per contravention for a body corporate.

“We much prefer that employers get it right in the first place,” Campbell said. “Pay slips provide employees with the clarity they need about their pay, and accurate record-keeping makes it easier to keep track of employee details, identify payroll mistakes and keep a business running efficiently.”

In total, the FWO issued 760 Infringement Notices nationally in 2023–24, with penalties paid totalling $986,616, an increase from 626 infringement notices in 2022–23 that yielded $739,966.

The FWO’s investigations continue after the site visits, and details of the findings including the number of Infringement Notices issued will not be publicised until investigations have concluded.

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Last week, the Fair Work Ombudsman (FWO) announced it had recovered $473 million in underpaid wages for nearly 160,000 workers in 2023-24, securing its largest penalties yet in its 15-year history.

In a recent statement, the FWO shared that $330 million of this amount came from large corporate sector businesses, which it named as a “priority area” for payment recovery.

Regarding the remaining $100+ million from non large-businesses, the regulator reaffirmed its commitment to assisting small-business employers and employees. Notably, it said that small business requests for advice on pay and entitlements rose by eight per cent in the 2023-34 period, underscoring the confusion many face around compliance.

Small-business employers seeking advice on pay obligations

According to the FWO’s annual report, half (50%) of requests to the Employer Advisory Service (EAS) came from businesses with five or fewer employees. The report also highlighted that “many” of these businesses were first-time employers.

“Most new employers have low levels of workplace relations knowledge and do not understand the basic principles of employing staff under an award,” the report stated.

The figures suggest that start-up founders and small-business owners, especially those new to the landscape or with limited resources, may struggle in particular with compliance.

ISB spoke to small-business owners and financial experts to explore the issue of complex regulations.

“Running an e-commerce business myself, I’ve seen how easy it is to get tangled in the complexity of pay rates,” said Chris Bajda, founder of Groomsday. “We had a situation in the early days where a contractor was accidentally underpaid because we misclassified their role. It wasn’t intentional, but it was still wrong. As soon as we realised what had happened, we corrected it by paying them the difference and making sure it didn’t happen again.”

Do employers underpay workers on purpose?

While there are exceptions, underpayment by SME employers is often unintentional, stemming from a lack of understanding of obligations.

Fred Van der Tang, who heads up payroll compliance system PaidRight, attributed some of the problem to the complexity of Australia’s awards system.

“The system’s complexity is compounded by the fact that a single business might have employees covered by multiple awards, each with different entitlements,” he said.

For small-business owners, this can make tracking entitlements like base wages, penalties, overtime, and leave allowances challenging.

“Navigating award compliance requires time, attention, and often external expertise, which many small businesses find hard to afford or access, leading to unintentional errors in worker payments,” Van der Tang added.

Luke Chapman of Simpro, which works with many small trades businesses, noted that small businesses often rely on outdated payroll methods like spreadsheets, paper timesheets, and emails, which can lead to inaccuracies. “This can lead to all kinds of inaccuracies or missing data, often resulting in workers being paid incorrectly.”

On the other hand, overreliance on digital solutions can also create issues. Stacey Price, a small-business owner and accountant, warned that accounting software can sometimes give employers a false sense of security.

“Accounting software makes people think you click three buttons and payroll is done, but that is far from the truth,” Price said. “Innocent mistakes happen because people think the software will tell them if things are wrong. That is usually not the case unless you are using a specific payroll program linked to awards to find the correct pay rates.”

What to do if you’re confused

If you’re struggling to understand your payroll obligations, you can contact the FWO’s Employer Advisory Service (EAS), which provides small-business employers with tailored written advice on payments, entitlements, awards, and record-keeping.

Checking out the FWO’s small-business showcase centre, or seeking professional advice, can also help keep your business compliant.

“Being an e-commerce entrepreneur has taught me that you can’t just rely on your own understanding when it comes to things like payroll,” said Bajda. “We’ve had to bring in outside help to stay on top of it all. At the end of the day, it’s about respecting the people who keep your business running.”

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The pharmacy, Fremantle Pharmacy in Fremantle, did not pay an employee accrued but untaken annual leave entitlements at the end of his employment. After failing to comply with a 2023 order to calculate and back-pay the worker’s entitlements, the FWO has taken the pharmacy operator, Downings Pty Ltd, to court.

Downings Pty Ltd faces a penalty of almost $47,000, while sole director Joseph Lenny could be penalised up to $9,390.

Meanwhile, an east-Melbourne greengrocer has been fined almost $8000 for failing to calculate and back-pay entitlements owed to a casual retail assistant. The Federal Circuit and Family Court imposed the penalty against Nilkanth Enterprise Pty Ltd, and its sole director Ashvinkumar Mavjibhai Chavan. The small business owner operated ‘Strawberry Point’ in Forest Hill.

The worker was an international student from India, and received $5,474 from Nilkanth Enterprise Pty Ltd only after the FWO commenced legal action.

Ombudsman Anna Booth said that many businesses don’t realise they can be penalised for failing to back-pay workers.

“Employers should also be aware that taking action to protect young and migrant workers is among our top priorities,” said Booth. “Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”

In both cases, the affected workers raised the issue with the FWO.

The post Two Victorian small businesses face penalties for failing to back-pay workers appeared first on Inside Small Business.

The recovery was a result of the surprise inspections conducted by Fair Work inspectors, who investigated 21 businesses in the Noosa Shire food precincts IN the suburbs of Noosa Heads, Sunrise Beach and Noosaville’s. The investigations included the fast food, restaurant and café sector, ranging from ‘high-end’ restaurants to ‘cheap eats’ venues. The inspections were prompted by intelligence from a range of sources, including anonymous reports.

A total of 19 investigations were finalised, resulting in the FWO finding workplace law breaches in 68 per cent of food outlets (13 businesses). The most common breach was underpayment of or failure to pay penalty rates (14 businesses), followed by failure to pay correct minimum wages for ordinary hours (11 businesses), failure to pay overtime (six businesses), failure to pay leave entitlements (six businesses), and record-keeping breaches (five businesses).

Fair Work Ombudsman Anna Booth stated that improving compliance in the fast food, restaurant and café sector was an “ongoing priority” for the FWO.

“These disappointing Sunshine Coast findings are part of a national food precincts program where we’ve often found that low-cost dining comes at the expense of workers’ lawful wages,” Booth said. “Employers must follow all wage laws, including penalty rates which generally serve as compensation for those working at times when most people are not. Those doing the wrong thing are being found out and held to account.”

The highest amount recovered from any one business was $105,137 for 99 employees, mostly casual wait staff and kitchen staff and a mix of adults and juniors who were underpaid their overtime hours and penalty rates.

Following investigations, the FWO issued 14 Compliance Notices, which resulted in the aforementioned recoveries of $223,107 for 447 workers.

Five Infringement Notices for payslip and record-keeping breaches resulted in $26,650 in fines paid, while one business remains under investigation.

The national program of audits has previously targeted eateries in Melbourne, Brisbane, Sydney, Adelaide, Hobart,  Gold Coast, Perth, Newcastle, and Canberra, among others. In 2022-23, FWO secured more than $800,000 in court-ordered penalties against food sector employers.

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This was the result of the surprise inspections conducted by Fair Work inspectors which targeted 46 businesses in Perth’s fast food, restaurant and café sector last year. The inspections were prompted by intelligence from a range of sources, including anonymous reports.

Of 41 investigations finalised, the FWO found 38 businesses had breached workplace laws, most of whom have underpaid or failed to pay penalty rates for their employees (33 businesses), as well as having failed to pay correct minimum wages for ordinary hours (33 businesses). Meanwhile, 25 businesses had committed both violations and 13 businesses had not met their employees’ leave entitlements.

Fair Work Ombudsman Anna Booth said that improving compliance in the fast food, restaurant and café sector was an ongoing priority for the regulator.

“These disappointing Perth findings are part of a national food precincts program where we’ve often found that low-cost dining comes at the expense of workers’ lawful wages,” Booth said. “Employers must follow all wage laws, including penalty rates which generally serve as compensation for those working at times when most people are not. Those doing the wrong thing are being found out and held to account.”

“Employers should access our wide range of free online tools and resources to ensure they’re meeting their obligations or contact the FWO directly for free advice,” Booth added. “We want to help businesses in the food sector get it right in the first place. We also urge workers with concerns about wages and entitlements to reach out to us, including anonymously if preferred.”

Following investigations, the FWO issued 38 Compliance Notices, recovering $742,658 for 359 workers. Some employers rectified underpayments without the use of an enforcement tool. The highest amount recovered from an employer was $77,673 for 53 employees who had not received the right weekend penalty rates, casual loading and base rates of pay.

The regulator also issued 13 Infringement Notices for payslip and record-keeping breaches, with fines totalling $38,380. The FWO continues to investigate five businesses.

Results are still pending following FWO inspections conducted in northern Perth food outlets in March this year.

The national program of audits has previously targeted eateries in areas such as Melbourne, Brisbane, Sydney, Adelaide, Hobart, Darwin, the Gold Coast, and Canberra. In 2022-23, FWO secured more than $800,000 in court-ordered penalties against food sector employers.

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The new National Minimum Wage is $915.90 per week (based on a 38-hour week for a full-time employee), or $24.10 per hour, an increase from $882.80 per week and $23.23 per hour. Meanwhile, casual employees entitled to the National Minimum Wage must receive a minimum of $30.13 per hour, which includes 25 per cent casual loading.

The National Minimum Wage is the base rate for adult employees in the national system who are not covered by an award or registered agreement.

The 3.75 per cent increase also applies from the first pay period starting on or after 1 July to the minimum wage rates within awards.

The increase may apply to employees covered by a registered agreement, as the base pay rate in a registered agreement can’t be less than the base pay rate in the relevant award.

Meanwhile, award and agreement-free junior employees get paid a percentage of the National Minimum Wage, using the age-based percentage scale in the Fair Work Commission’s order. Pay rates for employees under this category are based on the Miscellaneous Award 2020. There are special national minimum wages for award and agreement-free employees with disability.

Fair Work Ombudsman Anna Booth urged employers to check whether the 3.75 per cent increase applies to their employees and ensure they are paying workers correctly.

“Employers must pay their employees the correct wages. Employers and employees can use our free Pay Calculator and pay guides to check the lawful minimum pay rates applying from today, or contact us directly for assistance,” Booth said. “Rather than potentially having to back-pay employees and face court-imposed penalties down the track, employers should do the right thing from the start and pay applicable minimum wage increases from the first pay period starting on or after 1 July 2024.”

The FWO has updated its Pay Calculator to help employers and employees calculate the new pay rates. Employees who are unsure which award applies to them can use its Find my award tool.

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Fair Work Inspectors have already issued 151 Infringement Notices (fines) to employers since March 2023 when the FWO was given the power to issue fines on employers who post job ads offering illegally low rates of pay.

Fair Work Ombudsman Anna Booth said the regulator would communicate to major online job websites that both the FWO and the public expect them to play their part in stamping out unlawful ads and that they must cooperate with the FWO’s compliance activities.

“Dodgy job ads are unlawful, and some of them are scams, we want to stop dodgy ads before they appear,” Booth said. “We are calling on all job websites to maximise awareness to employers, recruiters and the public about the importance of advertising legal minimum wages.

“We are also requesting job websites make it easier for employers to put legal wage rates in their ads, such as by allowing advertising employers to enter their own specific wage figures rather than having preset ranges,” Booth added. “Employers should do the right thing when recruiting their workforce – and those who break the law are paying the price.”

Fair Work Inspectors have been routinely searching public job advertisement websites and contacting employers both to issue Infringement Notices and provide education. The FWO is looking at ways to increase its capabilities to undertake wider-scale surveillance of job ads and to detect non-compliant job ads through the use of enhanced detection tools.

Booth has reiterated the regulator’s stance in taking dodgy job ads seriously, including because they often deliberately targeted vulnerable people, such as migrants.

“We want to stop exploitation at the earliest moment – and trying to take advantage of migrant workers who may be desperate for income or unaware of their rights is appalling,” she said.

Current laws ban employers from advertising pay rates that fail to meet the minimum rates required by the Fair Work Act or an industrial instrument, such as a modern award, enterprise agreement, workplace determination or Fair Work Commission order.

The FWO cited one case of an advertisement for a casual food and beverage attendant at a café with a pay rate as low as $13.36 per hour. When a Fair Work Inspector contacted the employer about the ad, the employer claimed the lowest range was “close” to the introductory rate for someone younger than 17 and they should “only receive a warning”. The inspector countered that employers engaging staff to conduct recruitment activities are responsible to make sure those staff are educated as to the legal minimum rates of pay, and if a business is seeking junior employees, they need to make that clear in their ads. The business ended up paying a fine of $1375 and was given further education.

The post FWO cracks down on ‘dodgy’ job ads appeared first on Inside Small Business.

The inspections were prompted by intelligence from a range of sources, including anonymous reports of potential workplace violations. As a result of the investigations, the FWO found workplace law breaches in 73 per cent of food outlets (30 businesses).

The most common breaches were related to underpayment or failure to pay penalty rates (29 businesses), which variously included evening and night rates, and weekend and public holiday loading, as well as casual loading, followed by underpayment of minimum wages for ordinary hours (19 businesses).

Fair Work Ombudsman Anna Booth said improving compliance in the fast food, restaurant and café sector was an ongoing priority for the regulator.

“These disappointing Newcastle findings are part of a national food precincts program where we’ve often found that low-cost dining comes at the expense of workers’ lawful wages,” Booth said. “Employers must follow all wage laws, including penalty rates which generally serve as compensation for those working at times when most people are not. Those doing the wrong thing are being found out and held to account.

“Employers should access our wide range of free online tools and resources to ensure they’re meeting their obligations, or contact the FWO directly for free advice,” Booth added. “We want to help businesses in the food sector get it right in the first place. We also urge workers with concerns about wages and entitlements to reach out to us – including anonymously if preferred.”

The highest amount recovered from any one business was $82,583 for two casual fastfood workers who were not paid their casual minimum wages and their public holiday and weekend loading.

Following investigations, the FWO issued 26 Compliance Notices, which resulted in recoveries of $277,006 for 302 workers. Some employers rectified underpayments without the use of an enforcement tool.

Eight Infringement Notices for payslip and record-keeping breaches resulted in $22,497 in fines paid. Two businesses remain under investigation.

The national program of audits has previously targeted eateries in locations such as Melbourne, Brisbane, Sydney, Adelaide, Hobart, the Gold Coast, Perth and Canberra. The Ombudsman reported that in 2022-23, it had secured more than $800,000 in court-ordered penalties against food sector employers.

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The penalties include $130,806 imposed on Lotus Farm and $28,987 on one of its directors, Son Thai.

The Fair Work Ombudsman (FWO) investigated the company after receiving requests for assistance from two former employees who were non-English speakers. The employees alleged that they were paid unlawfully low flat hourly pay rates while working as pickers and packers at the farm.

Lotus Farm admitted that it failed to meet the minimum pay rates, casual loading, overtime and public holiday penalty rates set out in the Horticulture Industry Award 2010.

The company underpaid one worker $22,364 and the other $6167 for work periods between June 2017 and September 2020. Thai admitted to being involved in the underpayments.

Lotus Farm also provided false or misleading pay slips to the FWO, gave no payslips to the workers, made unlawful deductions from one worker’s pay and failed to make and keep records as required. Thai was also involved in these contraventions.

Acting Fair Work Ombudsman Michael Campbell welcomed the decision, saying that the penalties send a clear message that those who attempt to cover up significant underpayments, including with false payslips, will be found out and face costly consequences.

“The exploitation of vulnerable, non-English speaking migrant workers is not something we tolerate,” Campbell said.

Deputy chief judge Patrizia Mercuri described failing to provide the employees with pay slips and then providing false pay slips to the FWO as “particularly serious”.

“The provision of misleading information was clearly a deliberate act and had the potential to derail or extend the investigation,” Mercuri said.

In imposing the penalties, the deputy chief judge noted the need to reflect “the court’s strong disapproval” of them.

 “This is particularly so given the nature of the industry and the vulnerability of the affected employees.”

The underpayments have been rectified in full,” Mercuri concluded.

This story first appeared on our sister publication Inside FMCG

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Fair Work Inspectors have visited about 20 agriculture businesses, such as farms, vineyards and labour hire operators, which were chosen based on reports of possible underpayments committed against their workers or that they were employing visa holders who are often vulnerable to exploitation due to a lack of knowledge of workplace laws or an unwillingness to speak up.

Inspectors have been on alert for low rates of pay that breach the Horticulture, Pastoral or the Wine Industry Award (where applicable), including pay relating to piece rates; unauthorised deductions from wages; potential non-payment of overtime and inadequate breaks; payslip and record-keeping breaches; and other potential violations.

Acting Fair Work Ombudsman Michael Campbell said that continuing to boost compliance in the agriculture sector employers remained a priority for the agency.

“Where our intelligence says there is a high risk of non-compliance with workplace laws, we proactively conduct audits to ensure workers are receiving their lawful entitlements,” Campbell said. “We have been working constructively with agriculture employers and employees in the Mornington Peninsula and the Yarra Valley regions to check compliance rates. This includes assisting employers understand their legal responsibilities, such as proper record-keeping – the bedrock of compliance – and the minimum wage guarantee for pieceworkers.”

“Where we uncover any non-compliance from these inspections, we will ensure workers receive the entitlements owed to them” Campbell added. This can include taking enforcement action where appropriate. The agriculture sector commonly employs vulnerable workers such as backpackers and other migrants, who may have limited English skills, be unaware of their rights, or be unwilling to speak up. Visa holders should remember they have the same workplace rights as all other workers.”

The inspections are part of the FWO’s Agriculture Strategy, which began in December 2021 and has targeted more than 450 businesses in 15 ‘hot spot’ regions of Australia where there are identified high risks of non-compliance.

Investigations continue and results will be published at a later date.

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