Salary data shows wage theft is common with one in nine Australians always underpaid

Payroll research reveals two thirds of Australian workers are not receiving their full salary as wage theft reaches epidemic proportions. Here’s how to check if you are one of them.

Wage theft has reached endemic proportions, striking another blow to workers already struggling with the cost of living.

Shocking research from payroll provider ADP reveals two thirds of Aussie workers are not receiving their full wage entitlements, with one in nine reporting they are always underpaid.

The growing issue is exacerbated by a failure to quickly repay lost earnings, with more than 60 per cent of workers waiting more than one pay cycle to receive backpay.

More than half of workers also experience other underlying pay issues, such as failed payments or tax codes incorrectly applied.

Employee Matters managing director Natasha Hawker says the research is extremely concerning but not surprising and believes many companies don’t know how much their workers should be paid.

“The implication of this on employees is that they might be financially struggling more than they otherwise would,” she says.

Employees should be aware of how much they should be paid each shift to avoid receiving less pay than they are entitled to.

CHECK YOUR PAY SLIP

While the onus is on employers to pay staff correctly, Hawker suggests workers get to know their pay rates and check their pay slips for errors.

“It is important that employees don’t take for granted that they are, in fact, being paid accurately,” she says.

“It is a legal requirement to give all employees a pay slip for each pay period (and) this can help employees see that they are … being paid as expected.”

DMAW Lawyers senior associate Kylie Dunn advises workers to focus on penalty rates and the hours for which they apply.

“The main thing to look out for is the rate of pay that has been used for each shift, since it is generally not the case that an employee hasn’t been paid at all but rather that the incorrect pay rate has been applied – for example, a base rate instead of a penalty rate,” she says.

DMAW Lawyers senior associate Kylie Dunn. Picture: Tom Huntley

Those who believe they have been underpaid should notify their employer, who is then obliged to investigate.

Dunn says workers may also choose to speak with a HR or legal expert or report the matter to the Fair Work Ombudsman.

She says given that superannuation is calculated as a percentage of earnings, workers who discover issues of underpayment should also contact the Australian Taxation Office to check their super entitlements are correct.

MAKING ENDS MEET

Hawker says most issues of underpayment should be resolved within a fortnight but concedes it often takes longer – when her teenage daughter was underpaid for a retail job, it was months before she received any backpay, by which time her services were no longer required.

“She was effectively terminated for raising her workplace right to being paid correctly,” Hawker says. “This too is illegal.’’

While there is generally no financial assistance available for struggling workers waiting for underpayment allegations to be investigated, Hawker says some businesses may organise a payment in advance of any findings.

ADP legal director Irina Shainsky says reports of frequent underpayment have doubled in the past year, devastating already struggling workers.

“At a time when inflation and the cost of living is at an all-time high, more and more Aussie workers are finding it difficult to pay their rent, bills and basic necessities,” she says.

Employee Matters managing director Natasha Hawker.

HONEST MISTAKE

Dunn believes most businesses do try to do the right thing by their workers but says the legal framework for paying staff is complex.

“Despite their best intentions, some get it wrong,” she says. “This may be due to administrative or payroll system errors or a genuine mistake in understanding or applying the terms of the employee’s award or agreement.”

Shainsky says wage theft can harm companies, as well as impacted employees.

“Incorrect and late payments have the potential to create cash flow and staff retention issues for employers,” Shainsky says.

“These can also have a knock-on effect on a business’ reputation.”

Are you being paid correctly? Find out at https://calculate.fairwork.gov.au/findyouraward

COMMON FORMS OF WAGE THEFT

• Not paying penalty rates or shift allowances for working weekends or other hours outside an employee’s normal workdays or hours. All workers, including casuals and apprentices, are entitled to penalty rates if they work outside specific days or hours.

• Not paying properly, or at all, for overtime, or not giving workers their rostered days off or days in lieu. All workers, including casuals and apprentices, should be paid more if they work longer than normal daily hours.

• Unpaid breaks. Workers should be paid overtime or get proper time off in lieu if they miss their breaks.

• Not being paid super. Workers should receive 10.5 per cent of their earnings in their superannuation account at least quarterly. This money is on top of a worker’s other pay.

• Not paying for leave. All full-time workers and some part-time workers are entitled to paid personal, annual or long-service leave. Casuals should be getting more pay because generally they don’t get paid leave.

• Not receiving proper allowances. Allowances may be available for tools, meals, managers, travel and special clothing.

Source: Australian Workers’ Union

Originally published as Salary data shows wage theft is common with one in nine Australians always underpaid