Wage theft is on a roll: Sushi as a symbol of unpaid wages

Team Tanda

15 October 2018    |   

When we hear the word ‘sushi’, what normally comes to mind is a dish of specially prepared vinegared rice, usually with some sugar and salt, combined with a variety of ingredients, such as seafood, vegetables, and occasionally tropical fruits. Recently, however, the delectable Japanese cuisine has become the poster boy for unpaid wages thanks to a targeted audit by the Fair Work Ombudsman (FWO). The Sushi Blitz A few days ago, the FWO has audited 45 sushi businesses in New South Wales, Queensland, and the Australian federal capital Canberra, finding widespread non-compliance with workplace laws amounting to $746,203 in unpaid wages for almost 400 workers in a recent blitz of sushi restaurants. It found that 39 out of the 45 audited businesses committed workplace law breaches, which equates to a non-compliance rate of almost 90%. Furthermore, 37 of the audited businesses were found to have underpaid staff, while 29 had breached record-keeping and payslip laws. Workplace lawyers has described the blitz as a sign that the FWO is narrowing the focus of its widespread underpayment campaign, with an interest on specific categories within the food sector Ombudsman Sandra Parker said the audits followed “increased requests” for assistance from vulnerable workers in sushi outlets. “While the Fair Work Ombudsman never excuses employers who underpay their workers, we know that labour represents a significant cost in the food industry,” Parker said in a statement. The price of cheap sushi With the recent string of revelations from the audit, it was found that the victims of the non-compliance included young migrants and foreigners in Australia on the country’s popular working holiday visas. They were paid a flat rate that led to the underpayment of various loadings and leave entitlements. “Our activity identified that sushi eateries often employ vulnerable workers including young workers, migrant visa holders and those from non-English speaking backgrounds. The Fair Work Ombudsman has a strong focus on protecting the rights and entitlements of these vulnerable workers as they may not be fully aware of their workplace rights or are reluctant to complain,” Parker explains. With this, the FWO has asked consumers to consider the real price of cheap food. “Although everybody loves cheap sushi, perhaps we should ask ourselves — is what I’m paying enough to cover workers’ minimum wages and entitlements?” Read more: Taking Back Time: Solving the enduring wage theft problem in Australia Let the record state… Proper record keeping has also become a prime focus for the FWO, amid a spate of cases where businesses have either been found to have intentionally not kept adequate records or have failed to do so accidentally. Ombudsman Parker stated that they were particularly disappointed with the high level of record-keeping breaches discovered in the activity. “New laws mean employers face significantly higher penalties for serious breaches and we have no tolerance for employers that give inspectors false records,” Parker said in a statement. Some say that complacency was driving some SMEs to think just providing a payslip to employees was adequate, but this is not the case. While it can be said that the complex awards system is a root cause for non-compliance, the reality is that ignorance of the Fair Work Act will not shield an employer from its consequences. “You need a roster or some other time and attendance record to know when hours were worked, to see what the penalties and loadings at that time were,” Parker explains. The moral of the sushi With all this information presented before us, it’s about time we get to the moral of this sushi-centric story: The responsibility to pay staff correctly still falls squarely on the shoulders of employers, whether they’re running a retail chain, a neighborhood cafe, or a sushi joint. To a degree, business owners and managers can insure themselves against controversy down the line by investing in a time and attendance software. Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today However, at the end of the day, the best way to rid yourself of any controversy at all would be to educate yourself on whatever laws govern your industry and to be a good and lawful business owner for the benefit of your employees and yourself.

When we hear the word ‘sushi’, what normally comes to mind is a dish of specially prepared vinegared rice, usually with some sugar and salt, combined with a variety of ingredients, such as seafood, vegetables, and occasionally tropical fruits. Recently, however, the delectable Japanese cuisine has become the poster boy for unpaid wages thanks to a targeted audit by the Fair Work Ombudsman (FWO).

The Sushi Blitz

A few days ago, the FWO has audited 45 sushi businesses in New South Wales, Queensland, and the Australian federal capital Canberra, finding widespread non-compliance with workplace laws amounting to $746,203 in unpaid wages for almost 400 workers in a recent blitz of sushi restaurants.

It found that 39 out of the 45 audited businesses committed workplace law breaches, which equates to a non-compliance rate of almost 90%. Furthermore, 37 of the audited businesses were found to have underpaid staff, while 29 had breached record-keeping and payslip laws.

Workplace lawyers has described the blitz as a sign that the FWO is narrowing the focus of its widespread underpayment campaign, with an interest on specific categories within the food sector

Ombudsman Sandra Parker said the audits followed “increased requests” for assistance from vulnerable workers in sushi outlets.

“While the Fair Work Ombudsman never excuses employers who underpay their workers, we know that labour represents a significant cost in the food industry,” Parker said in a statement.

The price of cheap sushi

With the recent string of revelations from the audit, it was found that the victims of the non-compliance included young migrants and foreigners in Australia on the country’s popular working holiday visas. They were paid a flat rate that led to the underpayment of various loadings and leave entitlements.

“Our activity identified that sushi eateries often employ vulnerable workers including young workers, migrant visa holders and those from non-English speaking backgrounds. The Fair Work Ombudsman has a strong focus on protecting the rights and entitlements of these vulnerable workers as they may not be fully aware of their workplace rights or are reluctant to complain,” Parker explains.

With this, the FWO has asked consumers to consider the real price of cheap food. “Although everybody loves cheap sushi, perhaps we should ask ourselves — is what I’m paying enough to cover workers’ minimum wages and entitlements?”

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

Let the record state…

Proper record keeping has also become a prime focus for the FWO, amid a spate of cases where businesses have either been found to have intentionally not kept adequate records or have failed to do so accidentally.

Ombudsman Parker stated that they were particularly disappointed with the high level of record-keeping breaches discovered in the activity.

“New laws mean employers face significantly higher penalties for serious breaches and we have no tolerance for employers that give inspectors false records,” Parker said in a statement.

Some say that complacency was driving some SMEs to think just providing a payslip to employees was adequate, but this is not the case. While it can be said that the complex awards system is a root cause for non-compliance, the reality is that ignorance of the Fair Work Act will not shield an employer from its consequences.

“You need a roster or some other time and attendance record to know when hours were worked, to see what the penalties and loadings at that time were,” Parker explains.

The moral of the sushi

With all this information presented before us, it’s about time we get to the moral of this sushi-centric story: The responsibility to pay staff correctly still falls squarely on the shoulders of employers, whether they’re running a retail chain, a neighborhood cafe, or a sushi joint.

To a degree, business owners and managers can insure themselves against controversy down the line by investing in a time and attendance software.

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

However, at the end of the day, the best way to rid yourself of any controversy at all would be to educate yourself on whatever laws govern your industry and to be a good and lawful business owner for the benefit of your employees and yourself.

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Penalty Rates Decision: Sunday and Public Holiday Penalty Rates to be cut

Fair Work Penalty Rates Decision Source: The Fair Work Commission The Fair Work Commission has today announced that Sunday and Public Holiday penalty rates are to be cut across Hospitality, Retail, and Fast Food Awards, while Saturday penalty rates are to remain the same. Changes to Sunday Penalty Rates Sunday penalty rates for full time and part time hospitality workers will be reduced from 175% to 150%, rates for casuals will remain the same at 175%. Level 1 Employees under the Fast Food Award will see a reduction in Sunday penalty rates from 150% to 125% for full-time and part-time employees. Casuals will have a reduction from 175% to 150%. No changes will be made to Sunday penalty rates for Level 2 and Level 3 Employees under the Award. Full time and part-time retail workers will have Sunday penalty rates reduced from 200% to 150%. Casual Sunday rates for retail will also be reduced from 200% to 175%. Changes to Public Holiday Penalty Rates Public holiday rates for full-time workers in hospitality will be reduced from 250% to 225%, with no change for casual Public Holiday penalty rates. Changes to Public Holiday rates will come into effect July 1, 2017. However, The Commission has stated that the immediate implementation of updated Sunday penalty rates would create undue financial distress for Sunday workers. As such transitional arrangements for Sunday penalty rate changes will be made in the coming months. The decision was handed down after more than eight months of deliberation, and comes after The Productivity Commission recommended bringing Sunday penalty rates into line with Saturday rates in 2015. This is the biggest Industrial Relations decision The Fair Work Commission has made in recent years. It is hoped that reducing penalty rates will bring  about more ‘positive employment effects’ for businesses, and will “lead to increased trading hours, an increase in the level and range of services offered on Sundays and Public Holidays and an increase in overall hours worked.” With the outcome of the decision expected to come into play later this year, it is crucial that business owners have the correct tools and processes in place to update changes to wage rates correctly, and better manage their labour costs to capitalise on the penalty rate reductions.

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Public Service Announcement: Fair Work Crackdown

The recent spate of Fair Work crackdowns has increased concern for small business owners, as the severity and prevalence of non-compliance and underpayment continues to increase. Fair Work recently imposed a $143,000 penalty against a Brisbane Business Owner and his former internal Payroll and Account Manager, after it was uncovered that they had deliberately underpaid staff at a Japanese food outlet. While business owners have always been liable for such breaches, it is the first case of a payroll manager being penalised under accessorial liability. Accessorial liability has been one of the preferred tools wielded by Fair Work recently, as it focuses on looking past the principal company to further down the supply and managerial chain. The increase in the number of wage underpayments, has led the Federal Government to introduce the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. The Bill intends to increase the maximum penalties for those found breaching the Fair Work Act. It will seek to hold franchisors and holding companies responsible for actions of their franchisees and subsidiaries, if they are found to be in breach of the Fair Work Act. If passed, this legislation will see the maximum penalties for a company increase from $54,000 to $540,000, and maximum penalties for an individual increase from $10,800 to $108,000. Fines will be imposed for each offence, and could potentially see businesses facing over $1 million in penalties, for breaching the Fair Work Act. Fair Work has strict compliance guidelines and regulations regarding pay rates, payslip laws and staff leave entitlements. Business owners therefore need to be proactive in their approach to compliance, to ensure that they are legally meeting their compliance requirements. Businesses looking to gain greater compliance comfort and oversight into their business should implement workforce management software solutions for peace of mind and security to managing and paying staff. These solutions not only automate Award and EA calculations (where most of the payroll mistakes occur), but also provides oversight into the entire business, including pay rates, staff attendance and wage costs. For more information regarding the Fair Work Act and regulations please visit the Fair Work site.

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What you need to know about the Casual Conversion Clause

On 1 October 2018, the Fair Work Commission announced that a new casual conversion clause will be included in 80+ modern awards across Australia. What does it mean? Casual conversion is a right given to regular casual staff to request for full-time or part-time employment status, given certain prerequisites. In the awards, a ‘regular casual employee’ is: “A casual employee who has, in the preceding period of 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.” Businesses whose awards fall under mandate are required to advise their casual employees of this clause. This does not require employers to offer conversion to their eligible employees; rather, the clause entitles all eligible employees the right to request for conversion. Who can apply? The clause allows casual workers to apply for conversion if: They have  been working for the business for twelve (12) months; and Their work pattern is an ongoing number of hours over the past year, which can be continued without adjustment upon conversion to full-time or part-time. Employers must provide casual employees with a copy of the casual conversion clause within their first year of initial engagement with the business. Casual employees who are eligible to apply should request their employers in writing. Can applications be rejected? Yes, applications can be rejected. Reasonable grounds include: A significant adjustment of work hours for the employee in order to accommodate their full-time or part-time employment status; The employee worked for short periods and/or irregular shifts or hours; and The position of the casual employee will cease to exist in the foreseeable future. Rejection of applications can be done, given that both employee and employer have discussed the decision. Should employers not convert a casual employee, a written refusal must be provided, indicating the reasonable grounds of rejection. Read more: What is the Contingent Workforce and how can you leverage it in your business? What awards are covered? The introduction of the clause covers 80+ modern awards, including: Hospitality Industry (General) Award 2010; Food, Beverage and Tobacco Manufacturing Award 2010; Manufacturing and Associated Industries and Occupations Award 2010; Building & Construction General On-site Award 2010; Concrete Products Award 2010; Electrical, Electronic & Communications Contracting Award 2010; Graphic Arts, Printing and Publishing Award 2010; Plumbing and Fire Sprinklers Award 2010; Textile, Clothing, Footwear and Associated Industries Award 2010; and Vehicle Manufacturing, Repair, Services and Retail Award 2010 To check if your business is included, click here. What should your business do next? It’s important to keep in mind that Fair Work’s decision does not require businesses to convert casual employees in all cases where a casual employee makes a request for conversion to their employer.  For this reason, it’s important to understand the criteria for casual conversion and understand what your obligations are when employees meet these requirements. If you or your business falls under the new clause, here are the steps you can take to stay compliant: Check your modern award or enterprise agreement. Awards with existing clauses for casual conversion may have different requirements. Check your award for the exact rules in your industry. Create a casual conversion letter. You can also download a copy here. Notify your employees. Make sure you give your casual staff (employed as of 1 October 2018) a copy of the final letter. Record the outcome of the casual conversion offer. Whether they accept or reject the offer, keep copies of their written responses for future reference. If you are unsure how the casual conversion clause affects your business, call the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au To make sure you stay updated with the latest news on awards, employment, and compliance, subscribe to our newsletter today.

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