Large fines for underpayment in small business

Two businesses, a café and a retail shop owned by the same person, have been handed a $134,000 fine by the Federal Circuit Court of Australia, for the underpayment of three workers. This is a high price to pay for a small business.

The Fair Work Commission has said that the two businesses took advantage of the disadvantaged international workers, who were paid significantly below minimum wage.

The amount that the workers were underpaid by was $44,950, a significant amount which is dwarfed by fine of almost triple that amount – a clear demonstration of the seriousness with which the Fair Work Commission treats underpayment, and a clear warning to small businesses of the potentially ruinous costs of underpayment claims.

The Federal Circuit Court did not stop there. It personally fined the owner and sole director of both businesses an additional $10,896 for the failure to keep proper records and issue pay slips.

Finally, each individual worker was paid back in full according to their statutory entitlements under the Fair Work Act.

It is clear in this matter that poor record keeping and a failure to give regular pay slips contributed to the underpayment. It is an employer’s duty to ensure payment is consistent with the relevant award rate or National Employment Standards and to keep adequate records.

Get clear on what you need to do

Employees – if you believe you are being underpaid, not receiving penalty rates or are full or part time and are not receiving proper paid leave, get in contact with JFMLAW and we will be able to assist you in recovering you lost wages.

Employers – if you are unsure if you pay practices, contracts and policies are compliant or need assistance establishing pay rates then contact JFMLAW and we can ensure your business is compliant, so you can avoid costly fines.