Wage theft: South Australian employers underpaid workers more than $500m, inquiry told

A parliamentary committee has heard that 170,000 South Australian workers are either underpaid or do not receive their full superannuation entitlements — robbing them of heaps.

• When Jay Weatherill pledged country’s toughest wage theft laws

Wage theft is costing 170,000 South Australians about $570 million a year, a parliamentary committee has been told.

In its submission to a parliamentary committee into wage theft, the McKell Institute estimates one in five SA workers is underpaid, while nearly one in three do not receive their full superannuation entitlements.

Workers are unpaid $282.3 million of ordinary wages each year if each wage theft victim is underpaid by 3 per cent, McKell’s modelling shows.

Using Industry Super Australia figures, it estimates South Australians are underpaid $285.7 million a year in super, meaning the state’s workers miss out on $568 million of entitlements each year.

Wage theft is costing 170,000 South Australians about $570 million a year, a parliamentary committee has been told.

McKell Institute policy manager Edward Cavanough said McKell had extrapolated Fair Work Ombudsman compliance data to determine the number of affected workers.

He said McKell’s estimates were “conservative” because the FWO gave industries advance notice before launching compliance campaigns.

“We’re seeing wage theft become entrenched in the modern labour market,” he said.

“We talk so much about slow wage growth but what you don’t often see talked about is that 170,000 South Australians aren’t getting paid what they’re entitled to.”

He said wage theft was becoming increasingly common because there was “no cop on the beat” solely targeting it and because a combination of slow wage growth and the rising cost of living meant workers were “fearful of losing their jobs if they speak up”.

The institute has previously looked into wage theft in Queensland, finding 17.5 per cent of workers were being underpaid, slightly lower than the rate in SA.

But Mr Cavanough said he expected the rate of wage theft was “pretty consistent” across all states and territories.

McKell’s recommendations include for the State Government to strengthen labour-hire laws instead of trying to repeal them, reform the way superannuation is paid, and put better controls in place to ensure wage theft does not occur under government contracts.

McKell also recommends making wage theft a criminal offence in SA, and the introduction of education sessions targeting “high risk” industries such as hospitality and agriculture.