Business Basics

Don’t be guilty of wage fraud!

- November 1, 2019 2 MIN READ

From local cafés and restaurants to large retail conglomerates like Wesfarmers and Woolworths, it seems that we are hearing about a new underpayment scandal every other day. No matter how small or large your organisation is, any business owner can find themselves in hot water once accused of committing wage fraud, writes Tracy Angwin, CEO and payroll expert at Australian Payroll Association

However, there is a massive difference between organisations making mistakes in calculating employee pay-and-leave benefits, compared with wage theft or payroll fraud.

Wage theft is defined as the practice of paying workers less than they are entitled to under Australia’s workplace relations system. While payroll fraud put simply is when an individual within the company cheats the payroll system at their place of employment to receive funds to which they aren’t entitled to.

Just last week, Rockpool Dining Group was accused of destroying and doctoring timesheets to cover up the underpayment of its employees. The allegations came from migrant chefs that are on temporary visas. They claimed to witness managers and senior staff members alter the start and finish times of its staff members to ensure that their work hours were not recorded as being more than 38 hours a week.

While Woolworths, recently admitted to underpaying its salaried workers by almost $300 million with 5700 employees affected with the underpayments dating back to 2010. The difference here is that Woolworths came forward and admitted to making this mistake while Rockpool maintains that they have not doctored or destroyed any employee records.

I watched with interest as Rockpool continued to argue that the audit conducted into its practices was a poor audit, when in actual fact, they seem to have been processes in place to misrepresent the hours which should have been paid to employees.

Often, when a small business owner is accused of wage theft or underpaying its staff, the negative ramifications are worse than it would be for a larger organisation. This is due to the fines and costs associated with correcting underpayments that a small business might struggle to recover from. This makes wage fraud and underpayment a costly mistake for small business owners, one that they cannot afford.

When revelations of these issues arise, it highlights how crucial it is for business owners to avoid making mistakes like these by reviewing their payroll systems regularly. This is to ensure that they are calculating employee pay correctly. With employee awards and government legislation constantly changing, it’s vital that businesses hire highly qualified payroll personnel that attend regular training sessions either online or in-person to continue to develop their payroll expertise.


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