Hospitality Workers Underpaid More Than $1.2 Million

Close to 3000 café and restaurant workers across the country have been underpaid more than $1.2 million in wages due to penalty rate-related issues…

Following inspections conducted by Fair Work inspectors, it was found that over 450 businesses were found to have short-changed 2752 employees in Australia, with one in six of the underpayments reported being related to incorrect or of lack of penalty rates. According to Fair Work, one worker was owed over $40,000, plus more than $386,000 was recouped for 698 employees in Victoria alone.

Fair Work Ombudsman, Natalie James, explains that the underpayments were made clear as a result of the Fair Work Ombudsman’s National Hospitality Industry Campaign where 1066 employers were asked to supply their time and wage records for assessment. Out of those who were asked to supply their records, only 42 per cent were fully compliant with their workplace obligations.

“According to recent data, this is an industry with a vulnerable workforce comprised largely of young employees and low-skilled employees,” explains Natalie James.

“Employers were paying flat rates for all hours worked, which was often not enough to cover penalties, loadings and overtime.”

State-based recoveries were:

• $386,389 for 698 employees in Victoria
• $355,980 for 846 employees in Queensland
• $282,996 for 788 employees in NSW
• $63,967 for 193 employees in SA
• $51,650 for 62 employees in WA
• $29,795 for 77 employees in Tasmania
• $25,767 for 45 employees in the NT
• $18,759 for 43 employees in the ACT

Prior to the initiation of the campaign, Fair Work contacted the employers. Major stakeholders were also notified, including Restaurant and Catering Australia, United Voice, the Franchise Council of Australia, the Shop Distributive and Allied Employees Association, Australian Culinary Association, the Service Industry Legal Service and the Japanese/Australian Catering and Restaurant Information Service.

James says the hospitality sector was targeted for attention over three years from 2012-15 in response to more than 4500 requests for assistance from employees in 2010-11, a high volume of calls to the Fair Work Info line and a number of litigations against hospitality businesses for breaches of workplace laws.

Australian Council of Trade Unions president, Ged Kearney, explained that she was not surprised that some businesses were ripping off their employees.

“Not only is the hospitality industry actively campaigning to cut weekend and penalty rates, now we find out a huge number of employers are not even paying them in the first place,” she said.

“Sadly, it comes as no surprise that unscrupulous employers are outrageously ripping off some of the lowest-paid workers in the country, while hospitality industry groups are part of a public campaign to cut the weekend and penalty rates that so many workers rely on to pay their bills.”