Tech giant IBM underpays 1600 staff by more than $12 million

Tech giant IBM underpaid its Australian workers more than $12 million, with the regulator saying more payments are being calculated.

Multinational technology giant IBM has handed more than $12 million to Australian employees it underpaid and ordered to make contrition payments to the Commonwealth.

The computer hardware company self-reported to the Fair Work Ombudsman last year that it failed to provide employees with more than 15 different award entitlements and conditions, with the most significant issues relating to vehicle allowances, superannuation entitlements and annual leave loading.

A significant number of casual staff at IBM’s contact centre in Ballarat were paid the national minimum wage as opposed to the higher rates and entitlements in the applicable award.

IBM has paid back more than $12 million in underpayments to employees across the country.

IBM has identified and back paid 1647 workers a total of $12.3 million, which includes interest, for the underpayments that occurred between 2012 and this year.

The highest back payment was more than $145,000.

IBM has now signed an enforceable undertaking with the ombudsman, under which further underpayments – expected to be significant in size – must be calculated and paid by October 16.

“Under the enforceable undertaking, IBM has committed to stringent measures to comply with the law and protect its workforce,” Fair Work Ombudsman Sandra Parker said.

Fair Work Ombudsman Sandra Parker said it was ‘appropriate’ IBM entered an enforceable undertaking. Picture: Aaron Francis/The Australian

The contrition payments will be equal to 5.25 per cent of the underpayments IBM identifies – so far amounting to more than $645,000 – and must be made by November 27.

An expert will review the underpayments identified by the company, and any further errors will attract a higher contrition payment of 7 per cent.

IBM must also apologise to its workers.