Taking Back Time: Solving the enduring wage theft problem in Australia

Rosie Ramirez

24 August 2018    |   

A spate of wage theft accusations has swept across Australia. It left in its wake damaged reputations and millions in back wages. From the small Barry Cafe in Northcote to cosmetics giant Lush, employment practices, especially involving overtime pay, have been called into question. Some smaller businesses have also come under fire, mainly in the hospitality industry, where experts say wage theft and exploitation are rife. In the mad scramble to resolve these accusations, two questions emerge. Why does wage theft happen, and how do we solve it? Complex Awards system blamed for wage theft In the aftermath of a street protest by the former employees of Barry Cafe in Northcote, owner Anne Petroulias said a lack of understanding about the awards system led to underpayment. She admitted they were unaware of the wage rates, and thought weekend penalty rates could be traded off for staff meals. “My brother looked on Google and got the wage rates. I know we did wrong and we want to rectify anything.” Could it be that the complex award system is the root cause? Chamber of Commerce Chief Executive Greg Bicknell thinks it is a major factor. “The award system is quite complex for small businesses to use,” he said.  Recent Fair Work investigations seem to support this. A cafe in Darwin underpaid three employees $4,988 in total. They apparently misinterpreted the classification descriptions under the award. It’s not just small businesses, however, as even the popular cosmetics store Lush wasn’t immune. Last month, they committed to paying back $2 million to 5,000 workers. The massive breach, according to director Peta Granger, was the result of inefficiencies in its payroll system. This occurred during the 2010 transition to the system of Modern Awards. More recently, the Super Retail group declared they will pay $7.9 million in back wages to 4,500 staff members. According to Managing Director Peter Birtles, an internal review revealed employees were not paid under the correct award. They also approached time in lieu, overtime payments and allowances inconsistently.  “This was a genuine mistake that we deeply regret,” he emphasized. Dire consequences for businesses The reality, however, is that ignorance of the Fair Work Act will not shield an employer from its consequences. Last May, employees of Burch & Purchese Sweet Studio and Vue de Monde began to sue for back payments after allegedly working for more than 50 hours a week, for just 38 hours of pay, due to the incorrect application of annualised salaries. The owners of the restaurants, celebrity chefs Darren Purchese and Shannon Bennett, risk damaging not just their own brand. They also risk their many affiliations, such as MasterChef Australia. Indeed, the price is not just financial. Businesses can quickly lose their reputation in the controversies. Recall that last year, another celebrity chef and MasterChef Australia judge George Calombaris apologised after his restaurant group was caught underpaying 160 staff members a total of up to $2.6 million. Unsurprisingly, Calombaris’ professional credibility as a judge was questioned, and the incident is likely to cast a long shadow on his career moving forward. And it’s not just the owner’s personal brand at risk, because the businesses’ reputation as an employer is too. The spotlight on underpaying businesses revealed a slew of other unethical practices. The fixed pay at popular travel retailer Flight Centre, for instance, was revealed to be $4,000 below minimum wage. They made the rest of their legally mandated pay from commissions. Employees also complained of rare breaks and unpaid overtime, likely discouraging others to pursue a career with them. And without the best people, there is no way for a business to succeed. Read more: How to Serve 200 Customers Daily in an 8-seat Restaurant Beyond payment of back wages, governments are also now considering criminalising wage theft. Queensland’s Palaszczuk government began hearings last Thursday after being contacted by 169 people to detail cases of wage theft. Victoria’s Labor Government has also promised to introduce laws targeting employers who underpay their workers, with hefty penalties of up to 10 years in jail. Using tech to comply with Modern Awards While Fair Work Commission president Iain Ross admits significant improvements can be made to make understanding awards easier, businesses need to comply with the current system and fast. There is no question that the complexity of modern awards costs a lot of time, money, and effort. According to the Australian Payroll Association’s 2018 Payroll Benchmarking Report, it costs an average of $36.30 to produce a single payslip for companies with less than 200 employees. In addition, some employers cannot keep up when superannuation and tax policies change. But times have changed. Employers are no longer limited to old, unwieldy methods of complying with various laws. Automation has been introduced to many companies around the world. Businesses subscribed to automation software are able to use an impartial system that monitors time and attendance, tracks employee rosters, and applies modern awards. One such software is Tanda, whose library of modern awards automates payroll and wage calculation with minimal effort from administrative staff. Investing in time and attendance software ensures that businesses do not make the same mistakes that are now costing others millions. The revolution has begun, and it is expected that many more will follow. In fact, research from Willis Towers Watson found that workplace automation is expected to surge in the next three years. Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today Empower staff, improve business The responsibility to pay staff correctly falls squarely on the shoulders of employers. This is true whether they’re running a large retail chain or a small neighborhood cafe. And indeed, companies can insure themselves against controversy down the line by investing in time and attendance software. However, that’s not the only reason to do it. A fair system builds trust among employees. It empowers them to do their best in their respective roles. It’s a win-win situation because it maximises the bottom line without defrauding the front line and ruining the brand. When done correctly, time and attendance automation means there would no longer be a need for staff to protest on the streets, or form digital unions to fight wage theft. Employers will automatically comply with all regulations, every time. Automation can spell success for your workforce, and ultimately, your business, in more ways than one. The recent spike in accusations has already drawn attention to the weakness in how companies compute wages; now it’s time to solve it. Want to see comprehensive workforce success technology in action? We’re ready to show you – request a demo here.

A spate of wage theft accusations has swept across Australia. It left in its wake damaged reputations and millions in back wages. From the small Barry Cafe in Northcote to cosmetics giant Lush, employment practices, especially involving overtime pay, have been called into question. Some smaller businesses have also come under fire, mainly in the hospitality industry, where experts say wage theft and exploitation are rife. In the mad scramble to resolve these accusations, two questions emerge. Why does wage theft happen, and how do we solve it?

Complex Awards system blamed for wage theft

In the aftermath of a street protest by the former employees of Barry Cafe in Northcote, owner Anne Petroulias said a lack of understanding about the awards system led to underpayment. She admitted they were unaware of the wage rates, and thought weekend penalty rates could be traded off for staff meals. “My brother looked on Google and got the wage rates. I know we did wrong and we want to rectify anything.”

Could it be that the complex award system is the root cause? Chamber of Commerce Chief Executive Greg Bicknell thinks it is a major factor. “The award system is quite complex for small businesses to use,” he said.  Recent Fair Work investigations seem to support this. A cafe in Darwin underpaid three employees $4,988 in total. They apparently misinterpreted the classification descriptions under the award.

It’s not just small businesses, however, as even the popular cosmetics store Lush wasn’t immune. Last month, they committed to paying back $2 million to 5,000 workers. The massive breach, according to director Peta Granger, was the result of inefficiencies in its payroll system. This occurred during the 2010 transition to the system of Modern Awards.

More recently, the Super Retail group declared they will pay $7.9 million in back wages to 4,500 staff members. According to Managing Director Peter Birtles, an internal review revealed employees were not paid under the correct award. They also approached time in lieu, overtime payments and allowances inconsistently.  “This was a genuine mistake that we deeply regret,” he emphasized.

Dire consequences for businesses

The reality, however, is that ignorance of the Fair Work Act will not shield an employer from its consequences. Last May, employees of Burch & Purchese Sweet Studio and Vue de Monde began to sue for back payments after allegedly working for more than 50 hours a week, for just 38 hours of pay, due to the incorrect application of annualised salaries. The owners of the restaurants, celebrity chefs Darren Purchese and Shannon Bennett, risk damaging not just their own brand. They also risk their many affiliations, such as MasterChef Australia.

Indeed, the price is not just financial. Businesses can quickly lose their reputation in the controversies. Recall that last year, another celebrity chef and MasterChef Australia judge George Calombaris apologised after his restaurant group was caught underpaying 160 staff members a total of up to $2.6 million. Unsurprisingly, Calombaris’ professional credibility as a judge was questioned, and the incident is likely to cast a long shadow on his career moving forward.

And it’s not just the owner’s personal brand at risk, because the businesses’ reputation as an employer is too. The spotlight on underpaying businesses revealed a slew of other unethical practices. The fixed pay at popular travel retailer Flight Centre, for instance, was revealed to be $4,000 below minimum wage. They made the rest of their legally mandated pay from commissions. Employees also complained of rare breaks and unpaid overtime, likely discouraging others to pursue a career with them. And without the best people, there is no way for a business to succeed.

Read more: How to Serve 200 Customers Daily in an 8-seat Restaurant

Beyond payment of back wages, governments are also now considering criminalising wage theft. Queensland’s Palaszczuk government began hearings last Thursday after being contacted by 169 people to detail cases of wage theft. Victoria’s Labor Government has also promised to introduce laws targeting employers who underpay their workers, with hefty penalties of up to 10 years in jail.

Using tech to comply with Modern Awards

While Fair Work Commission president Iain Ross admits significant improvements can be made to make understanding awards easier, businesses need to comply with the current system and fast. There is no question that the complexity of modern awards costs a lot of time, money, and effort. According to the Australian Payroll Association’s 2018 Payroll Benchmarking Report, it costs an average of $36.30 to produce a single payslip for companies with less than 200 employees. In addition, some employers cannot keep up when superannuation and tax policies change.

But times have changed. Employers are no longer limited to old, unwieldy methods of complying with various laws. Automation has been introduced to many companies around the world. Businesses subscribed to automation software are able to use an impartial system that monitors time and attendance, tracks employee rosters, and applies modern awards.

One such software is Tanda, whose library of modern awards automates payroll and wage calculation with minimal effort from administrative staff. Investing in time and attendance software ensures that businesses do not make the same mistakes that are now costing others millions. The revolution has begun, and it is expected that many more will follow. In fact, research from Willis Towers Watson found that workplace automation is expected to surge in the next three years.

Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today

Empower staff, improve business

The responsibility to pay staff correctly falls squarely on the shoulders of employers. This is true whether they’re running a large retail chain or a small neighborhood cafe. And indeed, companies can insure themselves against controversy down the line by investing in time and attendance software. However, that’s not the only reason to do it. A fair system builds trust among employees. It empowers them to do their best in their respective roles. It’s a win-win situation because it maximises the bottom line without defrauding the front line and ruining the brand.

When done correctly, time and attendance automation means there would no longer be a need for staff to protest on the streets, or form digital unions to fight wage theft. Employers will automatically comply with all regulations, every time. Automation can spell success for your workforce, and ultimately, your business, in more ways than one. The recent spike in accusations has already drawn attention to the weakness in how companies compute wages; now it’s time to solve it.

Want to see comprehensive workforce success technology in action? We’re ready to show you – request a demo here.

Related Posts

Awards & Rostering Industry Insights    |   

Australian Businesses Suffer from Absenteeism

Definition: Absenteeism is the practice of regularly staying away from work without good reason. Everyone is guilty of absenteeism at least some point in their lives. But how do you know when absenteeism is becoming a real problem within your business? How much it is actually costing your business invaluable work time, productivity and money? A survey conducted in November 2014 by Direct Health Solutions, a firm that specialises in reducing workplace absenteeism, found that sick days are costing Australian businesses a record $33 billion in payroll costs and lost productivity. Sick days are not only costing Australian businesses money, they are also being incorrectly recorded. “Absenteeism levels are understated and incorrectly recorded in over 50% of organizations.” “To ensure employers understand the impact and cost of absenteeism to their business, companies need accurate recording and measurement systems in place” said Managing Director of Direct Health Solutions, Paul Dundon. Tanda, an award-winning time and attendance software, is a cloud-based system that helps small and large businesses manage their staff costs. Through the use of our automated time and attendance tracking software, in just a matter of minutes Tanda can calculate the total number of employees who take sick days along with the total cost of lost revenue and productivity due to absenteeism. Tanda offers a complete payroll administration system that allows businesses to manage and monitor time and attendance from any device at any time. The processing of an entire payroll that used to take hours to complete can be processed in a matter of minutes.   You can trial Tanda yourself for FREE to see just how easy it really is to use. We guarantee you’ll never look back.

Awards & Rostering    |   

Punctuality? Challenge accepted!

Tanda is taking punctuality to a whole new level with our Employee Attendance Reports and challenged employees this month to up their game. This was all in celebration of the anniversary of the Time Clock where we had a Bundaberg Rum giveaway prize to the lucky winner. Congratulations to Liz from Clement Coffee in Victoria, Melbourne for being a highly punctual employee! Clement Coffee’s obviously doing something right to create a great workplace atmosphere where employees don’t want to be late for work! Did we just gamify employee attendance? From a business point of view, every manager would love to see their employees get actively involved in turning up to work on time. Now with great accuracy using data from Tanda’s time clocks, businesses can track the exact times an employee clocks in and out, but also generate a report to see staff punctuality stats. Knowing this kind of information adds all kinds of value, especially to those dreaded performance reviews. Businesses with multiple departments/locations can even compete and compare scores at monthly meetings. Existing Tanda users can access the Attendance Reports already. Not using Tanda yet? Sign up for an account today.

Events & Media AU    |   

Tanda announces Global Partnership with AEVI

Tanda has announced a partnership with international technology company AEVI. The partnership will bring Tanda’s market leading workforce management solution to AEVI’s Global Marketplace for smart Point of Sale (SmartPOS) devices. This will revolutionise how merchants and business owners run and manage their business. Australia has some of the most complicated labour laws in the world, subsequently making it one of the most complex countries to run payroll in. Using Australia’s intricate labour conditions as a foundation, Tanda provides a robust and agile solution to business owners looking to streamline their workforce administration. Through Tanda users can improve productivity, profitability, and gain compliance comfort in how they manage and pay their staff. Press Release: AEVI and Tanda Partner to Simplify Workforce Management for Business Owners London 24/05/17 – AEVI has today announced a partnership with Australian-based technology company Tanda, to bring their industry leading cloud-based payroll and rostering solution to AEVI’s Global Marketplace; the B2B app store for smart Point of Sale (SmartPOS). This collaboration will enable merchants in the retail and hospitality space to streamline their workforce management via the apps seamless integration with AEVI’s range of compatible SmartPOS devices. SMEs are always on the lookout for innovative ways to save time and reduce costs. With Tanda’s market leading automated workforce technology, they can do just that. Rather than wasting time on payroll and HR, owners will be free to focus on the things that truly matter to their business. With over 145 million rostered hours across 2,500+ business locations around the world, Tanda combines all the workforce management tools a merchant could need into one simple, secure, solution. From reliable time clock applications to user-friendly digitised rostering, Tanda’s innovative software takes the guess work out of time management, ensuring employees are paid accurately and on time. The strategic partnership with AEVI will expand Tanda’s global reach, and make their solution available to a global network of key merchant banks and acquirers. With over 70,000 SmartPOS terminals already in operation across Australia and central Europe, AEVI is the ideal partner for Tanda to increase their speed to market, and expand into new regions. Liam Scanlan, Director of Strategic Development for Tanda said, “Partnering with AEVI will bring best of breed solutions to businesses all over the world, uniting Tanda’s leading workforce management software with AEVI’s Global Marketplace. Tanda and AEVI know there is an opportunity to make a real difference to the lives of business owners in how they pay and manage their staff, giving them more time to invest in running their business. Our combined offering helps achieve this.” “We are thrilled to bring Tanda’s market leading workforce technology to our Global Marketplace” said Mike Camerling, Director Marketplace, AEVI. “We could all use a little more time at work. Thanks to Tanda that is now a real possibility for the merchants of all our bank and acquiring customers.” AEVI continues its mission to pioneer and lead the payments community towards an open ecosystem. Providing banks and acquirers with the capabilities to differentiate themselves on more than just price and technical specifications. To find out more about how AEVI continues to grow its choice of value-added apps and services please visit marketplace.aevi.com. ~ENDS~ Note to Editors: About AEVI: AEVI brings acquirers closer to their merchants, and merchants closer to their consumers, with an open Ecosystem that combines apps, payment services and a multi-vendor selection of payment devices.  Selecting from a marketplace of high-quality apps and services, Acquirers can quickly create differentiated, innovative SmartPOS solutions under their own brands. Our centralized payments as a service platform eliminates obstacles, and helps Acquirers simplify the complex payment landscape with a single integration and access to a comprehensive suite of cloud-based, back office reporting tools for enhanced control and flexibility. We welcome Acquirers, App Solution Partners and Hardware Vendors to build on our vision of an open, collaborative payments Ecosystem unrestricted by device vendors, currencies, borders or regulations. www.aevi.com AEVI International GmbH is a subsidiary company of Diebold Nixdorf and is headquartered in Germany with operations in the United Kingdom and the Czech Republic.

More Resources

About the author

Rosie Ramirez

Our team's goal is to provide practical advice for business owners and managers across industries.

Share this article

Related Articles

Awards & Rostering Industry Insights

Australian Businesses Suffer from Absenteeism

Definition: Absenteeism is the practice of regularly staying away from work without good reason. Everyone is guilty of absenteeism at least some point in their lives. But how do you know when absenteeism is becoming a real problem within your business? How much it is actually costing your business invaluable work time, productivity and money? A […]

Awards & Rostering

Punctuality? Challenge accepted!

Tanda is taking punctuality to a whole new level with our Employee Attendance Reports and challenged employees this month to up their game. This was all in celebration of the anniversary of the Time Clock where we had a Bundaberg Rum giveaway prize to the lucky winner. Congratulations to Liz from Clement Coffee in Victoria, Melbourne for […]

Events & Media AU

Tanda announces Global Partnership with AEVI

Tanda has announced a partnership with international technology company AEVI. The partnership will bring Tanda’s market leading workforce management solution to AEVI’s Global Marketplace for smart Point of Sale (SmartPOS) devices. This will revolutionise how merchants and business owners run and manage their business. Australia has some of the most complicated labour laws in the […]

More Resources

Subscribe to the Tanda Blog!

Stay updated with the latest insights on frontline work, industry news, business templates, and other free resources.

*Please fill this field
*Please fill this field