‘Wage theft’ is a hot topic and a major focus for the Fair Work Ombudsman (FWO) with a string of recent high penalties being handed down against employers who have underpaid employees.

Common mistakes that attract the attention of the FWO

• Underpayment of entitlements in Awards, Enterprise Agreement and the National Employment Standards.
• Poor or no record keeping.
• Sham contracting arrangements.

Key risks of getting it wrong

The FWO may investigate a complaint made by an employee/s alleging underpayment of entitlements, or they may conduct a random investigation to see if you are compliant. Besides requiring you to rectify any underpayment, the FWO may prosecute for breach of the Award, Enterprise Agreement and/or National Employment Standards which can result in hefty penalties imposed against employers and any individual involved in an alleged breach.

An employee may choose to make a claim directly with the court to recover an underpayment of entitlements.

In addition, employers who are the subject of investigation or prosecution face issues such as reduced productivity, retention and disharmony in the workplace.

Next steps

If the FWO commences an investigation into an alleged underpayment issue, our Employment Lawyers can provide advice on how to handle the investigation and if preferred, represent you during this process. We can also work directly with the FWO to try to negotiate the best possible outcome for your business where this is considered necessary.