G8 underpaid childcare care workers $80 million

Australia’s largest private childcare provider has admitted to underpaying 27,000 workers.

G8 Education chief executive officer Gary Carroll. Picture: Scott Powick

Australia’s largest private childcare provider, G8 Education, has admitted to underpaying between $50 million and $80 million to 27,000 workers since 2014.

Chief executive officer Gary Carroll apologised to affected employees on Tuesday after revealing the “inadvertent” underpayments had been reported to the Fair Work Ombudsman.

The underpayments, stretching over a six-year period, were related to entitlements for overtime, minimum engagement periods and agreed hours of work and allowances.

G8 said a total one-off remediation costs was currently estimated to be $50 million to $80 million pre-tax. This included estimated direct wage costs of approximately $38 million to $60 million, superannuation and payroll tax, interest and remediation program costs.

Mr Carroll said G8 “deeply regrets that these pay errors have occurred”.

“We apologise unreservedly to any affected team member. As soon as we identified and quantified this issue, we initiated a remediation program to ensure they will be paid every dollar they are owed,” he said.

The United Workers Union said G8 posted a profit of $154.9 million last year and “it now appears that this profit was built by depriving educators of their minimum legal entitlements”.

Helen Gibbons, the union’s early childhood education and care director, said the union has been raising concerns for years and the extent of the issue has been exposed. “G8 should hang their heads in shame,” she said.

“This is a large company, mostly funded through government subsidies and making hundreds of millions of dollars in profit. G8 didn’t respect their educators enough to prioritise paying them properly.

“If this was genuinely a mistake, you would expect to see overpayments of wages as well as underpayments, and that is not the case. Instead, G8 have demonstrated an appalling callousness to educators employed on the minimum wage – by denying them even that level of financial security.”