Ignorance catches out employers on unpaid wages and penalty rates

Victorian businesses fork out more than $130,000 to employees after investigation uncovers failure to pay correct wages and penalty rates

October 12, 2011

Ignorance of workplace obligations has come back to bite regional Victorian businesses, with an investigation uncovering a failure among employers to pay correct wages and penalty rates.

The Fair Work Ombudsman’s random audit of 31 Ballarat businesses has led to 147 employees being back-paid entitlements totalling $130,662. All employees were reimbursed an average of $888 each.

Inspectors combed the books of 114 businesses across different industries and locations. Of the 112 audits completed, the Ombudsman says 72 employers were compliant while 40 recorded contraventions. Two businesses remain under investigation.

"The majority of contraventions related to underpayments of wages, shift loadings and penalty rates," a report on the audit campaign says.

Inspectors also found non-compliance with time and wages records and pay slip content.

Fair Work Ombudsman Nicholas Wilson says inspectors believed the breaches were the result of a lack of awareness by employers of their obligations, rather than a deliberate attempt to avoid them.

"It’s a fact that some businesses inadvertently breach workplace laws. When we find mistakes, we’re here to assist and give practical advice to employers on how to voluntarily fix them," he says.

"Of some concern to inspectors in the field was the lack of knowledge of payroll professionals, bookkeepers and accountants about the workplace obligations of the employers engaging their services."

Wilson says the Ombudsman targeted Ballarat following intelligence received by inspectors about potential non-compliance in the region. He says when inspectors identified contraventions, employers co-operated to correct the mistakes voluntarily.

"They have also now put processes in place to ensure these errors are not repeated in the future," Wilson says.

The Ombudsman also used its campaign to promote its role, telling regional workers it is important they understand there is somewhere to turn if they have concerns about their entitlements or discrimination in the workplace.

A failure to pay correct wages was the most common type of contravention, according to the audit’s findings. This was followed by loadings and penalty rates.

The Ombudsman says 16 of the 40 employers guilty of contravening workplace laws were identified as underpaying staff, while nine breached time and wage records and pay slip requirements.

"A further 15 (37.5%) employers…had both underpayments and technical contraventions identified," the Ombudsman’s report says.

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