The issue of wage theft has been boiling away in the kitchen for years, but it’s now front and centre thanks to recent news about a so called “master thief” underpaying his staff by almost $8 million.
This is a topic we’ve spoken about many times before; it’s nothing new but the general public haven’t always appreciated how widespread it is and just how catastrophic the repercussions can be.
On one hand, wage theft is a serious problem for business owners. If a competitor is cutting corners by underpaying employees, they can charge lower prices, take a large slice of the market and put other (legitimate) companies out of business. That not only means disaster for small businesses, but the lack of competition means Australian consumers are losing out and supporting illegal business models.
Obviously the greatest and most direct impact of wage theft is on employees. Wage theft makes employees vulnerable. Unscrupulous employers prey on those who are already in bad positions and can’t (or won’t) report them for fear of losing their job or simply not being heard. This issue is rife in small hospitality operators but it’s only the big ones that make the headlines.
The Black Economy Taskforce (chaired by the late Mr Michael Andrew) was in part established to combat the cash economy. Its report found that some hospitality staff refuse to work without cash or at least part-cash wages. It’s interesting to note now that some of the businesses that have paid a cash component to their workers are now finding themselves in Fair Work for alleged wage theft. Many other hospitality businesses are fronting the Commission for underpayments relating to overtime worked by fulltime employees (another prevalent form of wage theft).
Many businesses are struggling to pay staff since overtime penalties were introduced to many Modern Awards for casual workers (including the Hospitality and Restaurant Awards). Casuals earning overtime has caused a number of unexpected issues. Staff retention is becoming even harder now that the earning capacity of hospitality workers has essentially been ‘capped’ (unless their employer is prepared to pay high overtime rates of pay – most businesses do not or cannot). No longer can casual hospitality workers pick up more hours during busy periods to increase their earnings. We often hear about smaller businesses now paying staff in cash once they reach 38 hours to avoid the higher cost of overtime wages and to retain their staff.
For businesses who use agency for staff, you should do your due diligence to ensure you don’t unknowingly do the wrong thing. Not all agencies follow the rules (and some of them are big, well known players). Whilst technically if you are engaging staff via an agency it’s the agency’s responsibility to pay their staff correctly, if the agency isn’t and there is a negative story, you may well hit the headlines with them. If the rate looks too good, it probably is suspect.
We have recently acheived national StaffSure Accreditation which is a regular voluntary audit conducted by an independent body guaranteeing our compliance. If you have any queries about what else we do to ensure we are paying our staff correctly and compliantly with all laws, talk to us.
We are proud to being doing the right thing by our staff.
Proudly Pinnacle
Wendy Mead
MANAGING DIRECTOR