Across Australia, workplace investigations continue to show that employees are being paid less than their legal entitlements.
Following lengthy investigations, the Fair Work Ombudsman found that a well-known Melbourne hospitality company has been underpaying its employees over $7.8 million in wages and superannuation entitlements over several years.
Whether you’re new to a workplace or are an established employee, we encourage our members to remain vigilant about their wages and conditions and recommend they review the terms and conditions of their employment.
Here, we highlight the five common ways underpayments may occur:
Do you know what your minimum rate of pay is?
You can find your minimum rate of pay in your employment contract, enterprise agreement or modern award.
For employees covered by an agreement or an award, an underpayment claim may arise if you are incorrectly classified or your annual salary is being applied incorrectly.
If you’re not covered by an agreement or award, your minimum wage will most likely be the National minimum wage.
Please Note: From 1 July 2019, the minimum wage is $19.49 per hour, or $740.80 per 38-hour working week.
Are you getting paid overtime, penalty rates, loadings and allowances?
Underpayments can happen if you’re not being paid overtime, penalty rates, loadings, and/or allowances. You can find the details of these entitlements in an agreement or award if you’re covered.
Sometimes these types of underpayments can occur due to a misinterpretation of wording in an agreement or award. For example, there may be a disagreement about when an entitlement to a ‘Higher Duties’ allowance arises.
Do you know when you are entitled to paid or unpaid leave?
You should understand what your leave entitlements are and the circumstances in which you can take leave. You may feel pressured to take a form of unpaid leave or take their annual or long service leave rather than to use personal/carer’s leave.
If your employment is covered by the National Employment Standards, full time employees (pro-rata for part time employees) enjoy various types of paid leave, including:
- Up to 10 days paid personal/carer’s leave per year
- Up to 2 days paid compassionate leave per occasion
- Up to 10 days paid jury service
Have you been offered unpaid work experience or an unpaid internship?
Sometimes, the work being performed by interns or on a placement may be indicative of an employee status rather than an unpaid intern status.
Unless you are on a “vocational placement” as defined by the Fair Work Act, employees are required to be paid by their employer. This will less likely occur:
- Where the internship/placement is short
- Where there is relatively no significant commercial value for the company out of the work you are performing (for example, shadowing a senior member of staff)
- Where the placement is mainly for your benefit
A vocational placement or internship involves observing how a company works as an educational experience, rather than completing work for their bottom line. If the work is not being performed as a requirement of an education or training course, it may not fit the definition of “vocational placement.”
Have you been offered a position as an independent contractor?
Sham contracting occurs when an employer misrepresents an employee as an independent contractor. This is usually done for the employer’s own benefit to avoid paying an employee their entitlements. Whether this is done deliberately or recklessly, sham contracting is an offence under the Fair Work Act.
If you have concerns about any of the above types of underpayments, please contact us for assistance and advice and make sure you have your employment contract and pay slips ready.
This publication is general information only and is not intended to be used as legal advice or a substitute for legal advice.