Over 200 Take-Away Food Shops Pay Back Over $500,000 In Unpaid Wages

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Over 900 take-away food workers across Australia have been repaid a total of $582,410 in unpaid wages, thanks to a national campaign by the Fair Work Ombudsman. A total of 223 businesses were implicated, with one business owing employees more than $35,000.

The finding came this week as part of a national campaign which targeted 565 takeaway food shops throughout the country. Just over half – 53 per cent – were paying their employees correctly, with just 33 per cent found to be fully compliant with all payslip and record keeping obligations.

Acting Fair Work Ombudsman Michael Campbell said it’s up to industry leaders to dramatically improve its compliance.  “The Fair Work Ombudsman is striving to build a culture of compliance where businesses understand and comply with their lawful obligations and do not inadvertently or deliberately undercut their competitors by paying black market wage rates,” he said.

“Clearly, the take-away food sector, an industry comprised largely of small businesses, is grappling with the complexity of the IR system and few it seems are joining industry bodies to seek professional help and advice.

“It is important that major players in the hospitality sector, industry groups and intermediaries such as accountants and lawyers, all play their part to help lift the levels of compliance above what we are seeing now.”

State-based recoveries were:

  • $154,609 for 269 employees in Victoria,
  • $132,433 for 218 employees in Queensland,
  • $99,527 for 140 employees in South Australia,
  • $84,517 for 120 employees in NSW,
  • $32,076 for 41 employees in the Northern Territory,
  • $30,245 for 54 employees in Western Australia,
  • $26,305 for 60 employees in Tasmania, and
  • $22,698 for 27 employees in the ACT.

Mr Campbell says the most common wage error identified was the underpayment of minimum hourly rates.

“Inspectors found some employers providing flat rates of pay for all hours worked, with many advising they had adopted this practice to simplify their payroll processes. In nearly one-third of cases, the hourly rate paid was not enough to cover hours attracting penalty rates and loadings, resulting in additional errors.”

A number of businesses were also inadvertently paying their staff under the Restaurant Industry Award instead of the Fast Food Industry Award because the business provided both take-away and dine-in services.

Peter Strong, chief executive of the Council of Small Business of Australia (COSBOA) told KBB that this highlights the confusing nature of the award systems. “In a few cases, they just chose the wrong award. There’s one that’s restaurant and one that’s fast food. We need a single small business industrial award then it doesn’t matter what you’re doing, you know what wages you’ve got to pay.”

“Nobody’s a pay expert in small business and that means you and your employee can look at the screen and it’s really obvious what the pay is. Hopefully it’ll be obvious when penalty rates come in because at the moment its really hard. Fair Work is working with our members on getting plain English into our awards, which is good. At the moment, it’s a systemic problem.”

Until the current system gets easier, Strong says there are still actions small businesses can take. “Join an association if you can, there’ll be someone you can talk to. Ring the Fair Work Ombudsman. And finally, when people come to you and say they’re willing to work for less money because they’re desperate for a job, don’t employ them. You can’t do it.”

Fore more information, check out Fair Work’s tools and resources here.