An allied health business owner who failed to backpay a worker their owed entitlements was penalised $7,992 by the Fair Work Ombudsman and back-paid the worker of $10,387, plus more than $1,000 in superannuation.
Wage theft is when an employer doesn't pay an employee their lawful entitlements. This may include paying incorrect wages, not adhering to an applicable modern award or enterprise agreement or paying other entitlements incorrectly. The Fair Work Ombudsman (FWO) takes matters of underpayment very seriously, and intentionally underpaying employees can be a criminal offence under various Federal and State laws.
In October 2024, the FWO secured a $7,992 penalty in court against the operator of an allied health business in Adelaide.
The penalty was imposed when the business owner failed to comply with a Compliance Notice requiring them to calculate and back-pay entitlements owing to a worker who was initially a part-time allied health practitioner and then became a full-time principal practitioner.
The business back-paid the worker a total of $10,387, plus more than $1,000 in superannuation, only after the FWO commenced legal action.
The FWO investigated after receiving a request for assistance from the affected worker. A Fair Work Inspector issued a Compliance Notice to the business owner after forming a belief that the company had underpaid the worker.
The Inspector formed a belief that the worker was not paid any wages for the final three weeks of work they performed, as owed under the Health Professionals and Support Services Award 2020, and was not paid accrued but untaken annual leave entitlements at the end of his employment, owed under the Fair Work Act’s National Employment Standards.
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In 2019, a Melbourne dentist was penalised $5,355 and ordered to back-pay a former employee $32,889 plus interest, following legal action by the FWO.
The previous year, the FWO issued a Compliance Notice to the dental practice, but the notice was ignored.
“Fair Work Inspectors are increasingly using Compliance Notices to address underpayments and we will not tolerate them being ignored,” said the FWO. “The clear message to employers is that if you don’t comply with the terms of a Compliance Notice, we won’t hesitate from taking you to court to enforce them and seek additional penalties.”
Employers who underpay their staff are breaking the law and taking a huge risk.
As a manager or business operator, it is crucial that you are aware of your obligations – the potential penalties for such infringements have never been higher. Changes made by the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 mean companies involved in serious contraventions now face penalties of up to $630,000 per contravention. The maximum penalties for individuals are now $126,000 per contravention. The Act also doubled the maximum penalty for failing to keep employee records or issue pay slips to $63,000 for a company and $12,600 for an individual, and tripled the maximum penalty for knowingly making or keeping false or misleading employee records to $12,600 for an individual. A reverse onus of proof can also now apply, meaning that employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove allegations of underpayments made in a court.
Does your business comply with workplace legislation? All employers need to ensure that they are complying with all relevant workplace legislation to avoid the potential risks. WorkPlacePLUS has a specialised HR team that can support employers to meet their workplace obligations.
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