The theft of wages and superannuation is becoming ‘a business model’ as examples of workers forced to pay back employers emerge

This article is more than 2 years old

This article is more than 2 years old

Tens of thousands of Australian hospitality workers routinely have wages and superannuation stolen by their bosses, according to the union representing the industry.

As the Fair Work Ombudsman begins a nationwide audit of 1.000 businesses, the Victorian secretary of United Voice, Jess Walsh, told Guardian Australia that wage theft had become a “business model” in the hospitality sector.

“Students, young people and international students are being hit hardest but wage theft is no longer a minority issue,” she said.

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“Wage theft has become a business model in hospitality, in retail and across the workforce.”

Walsh said huge numbers of workers “had experience with having wages and superannuation stolen by employers”.

A survey of 624 workers conducted by United Voice last year estimated 76% of hospitality businesses were underpaying their staff.

In the past month alone the union has received reports of a cafe worker earning just $5 per hour cash-in-hand with no penalty rates; qualified pastry chefs being paid just $10 per hour; and venues charging customers a public holiday surcharge without passing it on to workers by paying penalty rates.

“One city cafe relies on backpackers working for weeks who don’t get paid at all,” Walsh said. “Stealing wages is too easy and the punishment is too light.”

On Wednesday the Fair Work Ombudsman announced an audit targeting the fast food, restaurant and cafe sector which will penalise businesses exploiting vulnerable workers, including students, casual staff and immigrants.

It follows numerous high-profile cases of workers being exploited, including a cook who was employed by Bar Coluzzi in Sydney on a 457 skilled worker visa who was told by her boss to repay $13,952 of her wages to cover tax and superannuation contributions. She was also working excessive unpaid overtime.

The convenience story chain 7-Eleven was found by a Senate inquiry to have been forcing workers to go to ATMs to withdraw and pay back wages. The panel investigating 7-Eleven told the inquiry it had made 188 determinations that 7-Eleven was liable to pay workers a total of $4.36m, with workers being underpaid an average of $23,000 each.

A Fair Work Ombudsman spokesman told Guardian Australia that intelligence from a range of sources found failing to pay the correct hourly base, penalty and overtime rates, and ignoring record-keeping and payslip requirements were consistent issues.

In 2016–17, 44% of the hospitality workers assisted by the ombudsman to resolve workplace disputes were aged under 26, and 31% were visa holders. Despite the hospitality industry employing around 7% of Australia’s workforce, it accounted for the highest number (17%) of disputes. It was also the industry with the highest number of anonymous reports received (36%), infringement notices issued (39%) and court actions commenced (27%).

While workers under the age of 25 account for about 15% of the Australian working population, they were involved in 28% of workplace disputes the ombudsman took on in 2017. Migrant workers make up 6% of the Australian workforce, however 18% of workplace disputes involved a visa holder.

The ombudsman has begun auditing 1,000 businesses across the country and investigators will check the time and wage records of randomly selected businesses, especially those employing a large numbers of vulnerable workers. Companies involved in serious contraventions will face penalties of up to $630,000 per contravention. The maximum penalty for individuals is now $126,000 per contravention. Failing to keep employee records or issue pay slips attracts a penalty up to $63,000 for a company and $12,600 for an individual.