Underpayments rife

Underpayment of wages has become routine in parts of the workforce with recent migrants and temporary visa holders among the most exploited.

Unions NSW has launched a campaign to reduce the deliberate underpayment of wages, which it calls wage theft.

The organisation, which represents most of the state’s unions, has carried out an audit of job advertisements on Chinese, Korean and Spanish language websites.

It found 78 per cent of businesses advertised rates of pay below the minimum Award wage.

Unions NSW has published its findings and set up a website including a “wage thieves register” (http://www.wagethieves.com.au/wp/). The site allows the public to anonymously report employers who underpay wages.

“The current approach to redressing migrant worker underpayment and Fair Work Act protections are not working,” the report says.

“The system relies heavily on individuals reporting underpayments to unions or the Fair Work Ombudsman. There is no recognition of how difficult and dangerous it is to take this first step.”

The report says workers from non-English-speaking backgrounds including those on temporary work visas often face language barriers and are unaware of their workplace rights.

“They must also consider how a complaint could threaten their visa or residency status.

“There is a flourishing culture of underpayments in some sections of the workforce where businesses ignore Awards and instead defer to unregulated ‘local wage markets’ to determine the rates of pay for their staff.

“Unions have been restricted from accessing these workplaces to investigate and rectify underpayments.”

Improved union access part of the solution

Unions NSW calls for a new approach to uncovering and investigating wage theft.

It wants to change the Fair Work Act, which now restricts unions from conducting workplace checks on businesses suspected of underpaying and exploiting workers. Unions are now only able to check the pay records of union members.

It wants higher penalties for employers found to have knowingly or intentionally underpaid their staff, including criminal penalties and restrictions on individual offenders from managing a corporation.

Companies found to have underpaid workers should be named and shamed on a national public register of employers.

The Unions NSW audit targeted the “extensive network of websites and social media pages directed at people from specific nationalities and language groups who are new to a particular city or town.”

On Chinese, Korean and Spanish language websites it found “overwhelming” rates of underpayment for jobs in hospitality, cleaning, transport, construction and retail.

“Employers in these industries who have been caught underpaying workers have often claimed they were guided by an artificial wage market within their industry/geographical area,” the report says.

On average, underpaid jobs were advertised at $14.03 an hour, representing an average underpayment of $5.28 an hour when compared to the relevant minimum awards.

The lowest rates of pay were $4.20 an hour for a nanny (minimum award $18.91 in 2015–16) and $9 an hour for an office clerk (minimum award $18.38 in 2015–16).

Repeat offenders are common

Unions NSW says audits by the Fair Work Ombudsman have revealed repeat offenders, who despite being caught and fined, continue to underpay workers.

Just this year, Fire and Stone Restaurant faced $72,000 in penalties for its second offence of underpaying workers, while packing service Rapid Pak underpaid workers $23,479 and had previously underpaid workers $60,000.

Gold Coast restaurant Samurai’s Paradise was found to have paid a worker as little as $8 an hour. Immediately following the payment of back pay, it reverted to the $8 rate.

A 2016 survey of 1433 international students and 959 local students from Sydney, found 87 per cent of international students and 43 per cent of local students who worked in hospitality were underpaid for weekday work.

The Unions NSW campaign follows a joint Fairfax Media/ABC investigation of 7/11 convenience stores, which showed the franchise business model relied on the underpayment of workers.

An elaborate scheme of book-keeping forgery and threats to staff was used to hide rampant underpayment of workers, mostly on temporary work visas.

A recent Four Corners investigation found use of blackmail to underpay and silence workers was rampant on farms and factories across Australia.

The Fair Work Ombudsman has only 240 inspectors nationwide to cover Australia’s 12 million workers.

ALP promises to get tough

NSW Labor leader Luke Foley has pledged an ALP government will introduce the toughest fines in Australia to crack down on wage theft.

Foley said Labor would punish businesses that repeatedly engage in wage theft, including those who pay workers half the legal minimum wage, or pay for only half the hours worked.

“When there is systematic exploitation of workers in the workplace, government has a responsibility to intervene,” Foley said.

“Vulnerable young workers are being cheated out of a staggering amount of wages by unscrupulous bosses and it has to stop.”

Across Australia, youth unemployment is sitting at 13.3 per cent, significantly higher than the overall unemployment rate of 5.9 per cent.