What to do if you are underpaid

Employees being paid late or underpaid has been rising throughout the pandemic, but you don’t have to accept it. Here’s what to do.

Reports of incorrect wages have increased since the Covid-19 pandemic, as employers navigate the new business landscape and employees become more vigilant with pay slips.

But if you find yourself in this situation, you do not have to accept it – there are simple steps a worker can take to ensure they earn what they deserve.

New research from payroll services company ADP reveals more than half of 1900 surveyed Australians – working full time, part time and on contracts – have recently been underpaid (52 per cent) or paid late (51 per cent).

The findings come as high-profile cases of incorrect payments are pursued by the Fair Work Ombudsman.

Earlier this month, the FWO had recovered more than $300,000 for security workers at Covid-19 quarantine hotels in Melbourne and Sydney.

In June, they had commenced legal action against Woolworths following a 2019 review that uncovered the underpayment of salaried managers.

More aussies are being underpaid or paid late. Picture: Thinkstock

While salaries had been set to cover ordinary working hours and reasonable overtime, the number of hours and when they were worked had not been adequately factored in.

A Woolworths Group spokesman says more than $370 million in back payments have been made and further ex-gratia payments will go out before Christmas.

“We’ve worked through hundreds of millions of records as quickly as we can to ensure former and current team members have been paid what they were entitled to, plus interest and superannuation,” he says.

“Importantly, we’ve also put in place a wide range of checks and balances to prevent it from happening again.”

This Federal Court case is ongoing.

THE COVID FACTOR

Incorrect and late payments are not a new phenomenon, but ADP Asia Pacific Vice President for client services Kylie Baullo says reports have increased since the Covid-19 outbreak for two main reasons.

Firstly, small businesses in particular have had to navigate constant business uncertainty, increased support for employees, government incentives and support packages, and the pace of legislative changes, such as payroll tax and JobKeeper.

Secondly, employees have paid closer attention to their pay slips.

“Employees were better informed and wanted to ensure they got their wage entitlements – it was hard to miss the financial entitlements with JobKeeper as they featured consistently across social and traditional media,” she says.

“Some employees earned a different amount to their usual pay slip under JobKeeper – with some earning more – which also led to paying more attention to their pay slip.”

More than a third (34 per cent) of surveyed Australians say they now review their pay more closely than before the pandemic.

Melbourne’s Trina Raymond, 42, checks every pay slip she receives – not because she has ever been short changed, she just prefers to be organised.

“I’m one of those people,” the Icon Agency public relations account manager says.

“I am a single mum with two kids and a mortgage to keep track of, so things like leave are important.”

Trina Raymond, 42, Trina checks every payslip to make sure she is on top of her finances. Picture: Jason Edwards

The FWO suggests anyone who believes they have been incorrectly paid should first check their entitlements by finding their award and pay rate via fairwork.gov.au.

If there is a discrepancy, they can then follow these steps:

1 Prepare your facts

This includes past pay slips and information from the FWO website.

The FWO suggests being ready to show what you think your correct pay rate is and how much you estimate you are owed.

Then, arrange a time to talk to your employer and bring a support person if you think that will help you remember the discussion.

The FWO website also offers short courses in how to handle difficult workplace conversations.

2 Talk to your employer

Be calm and open about the situation.

If your employer is unsure if there has been an underpayment, you can suggest they contact the FWO to confirm.

Work out the next steps with your employer and write some notes during or after the meeting about what was discussed and agreed to.

3 Follow up

The FWO recommends sending a follow-up email to your employer after the meeting that includes a summary of the discussion and agreement.

Give your employer time to respond – for example, one week.

If the agreed underpayment is a large amount, your employer might ask if it can be paid in instalments.

You will need to reach an agreement and put it in writing.

If your employer agrees to back pay you, acknowledge the agreement and check the correct money is paid.

If the issue cannot be resolved, contact the FWO.

Originally published as What to do if you are underpaid