Underpaying Employees: Wage Theft
Dec 21, 2023Earlier this year, a Director of a large national company was found personally liable for wage theft after underpaying roughly 150 employees, although not consciously aware that this was the case - let's look at what happened!
So, in 2013, the Director sat down with the Chief Financial Officer at the time to discuss employee costs aka. employee wages, and more specifically, how these would be calculated and paid.
In this discussion the Director was presented with 2 options:
Option 1: Paying employees minimum award rates + uniform allowances + casual loading + weekend penalties, where applicable. This option would roughly cost the company $887,690 per year.
Option 2: Paying employees minimum award rates + uniform allowances + nothing else, even where employees were required to work on weekends. This option would roughly cost the company $341,214 per year.
The director chose option 2, which has now resulted in 150 employees being underpaid a collective sum of more than $160,000.
Now... while the Director claimed that they were unaware that option 2 was unlawful, the court took into consideration their knowledge and ignorance towards the effect of their decision.
This case highlights an important message for employers - make sure you are paying in accordance with the relevant Award and/or industrial agreement that you are covered by!
To read the full article by King & Wood Mallesons, click here.
If you want to check that you are complying with all relevant legislation and regulations, please reach out to the Employii Team at [email protected]
Author: Chelsea Finlay (HR Officer).
