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Home > News > 2018 > November > Wage theft costing a generation billions

Wage theft costing a generation billions

youngwomanportraitbw.jpgWage theft is costing Queensland workers billions in denied wages and superannuation according to estimates in a new report.

 

The McKell Institute’s Wage Theft Economic Distress report released this month estimates 18% of Queensland’s workforce (or 437,000 workers) have not been paid their full wages and entitlements.

 

If all affected workers were underpaid by just 5% this equates to $1.2 billion dollars in lost wages.

 

This does not take into account superannuation underpayments which are estimated to affect 23% of Queensland workers and cost $1.1 billion in lost super every year.

 

Wage theft acutely impacts the hospitality and retail sectors, but no sector is immune from the shameful practise.

 

The report outlined the myriad of ways in which wage theft can occur, including:

  • Employees needing to “pay an upfront deposit” for a job;
  • Employees needing to pay money back in cash to employers after receiving wages;
  • Denying approval for paid professional development leave (an award entitlement);
  • Pressuring workers not to record overtime;
  • Not paying overtime when it is claimed;
  • Not paying or underpaying superannuation;
  • Non-provision of meal breaks;
  • Incorrectly classifying workers;
  • Unpaid redundancies;
  • Working for “free” whilst training;
  • Not paying staff to attend mandatory staff meetings; and
  • Payment in the form of food and beverages, not wages.

The McKell Institute report follows news from the Fair Work Ombudsman (FWO) that close to 40% of business caught breaking workplace laws, including wage underpayments, were still engaging in the practise when subsequently reaudited.

 

Foodora sham contracting denied workers $7.5 million

Administrators dismantling defunct food delivery service Foodora have admitted 5,000 delivery riders were incorrectly classified as independent contractors rather than employees.

 

The incorrect classification of these jobs meant workers were underpaid $7.5 million in wages and super.

 

Parent company Delivery Hero, which recently reported global revenue forecasts of $1.2 billion, has offered $3 million to settle its Australian debts – meaning workers are unlikely to be fully reimbursed for their lost entitlements.

 

Scourge of wage theft must end

IEUA-QNT Branch Secretary Terry Burke said the timely McKell Institute report shone a light on an endemic culture of worker exploitation that is occurring in many Australian workplaces.

 

“From big businesses to celebrity chefs, Australia’s recent history has been littered with cases of wage theft by employers preying on vulnerable workers,” Mr Burke said.

 

“The Fair Work Act is designed to ensure every worker in Australia receives at least the minimum entitlement of wages and conditions for their industry.

 

“Sadly, the intention of this legislation is often wilfully undermined by unscrupulous or negligent employers.

 

“Each time such a case is uncovered, our movement must highlight shameful employer activity – not only to tell them that such action will not be tolerated but to reiterate to workers the value and importance of being part of their union.

 

Mr Burke said the national union-led Change The Rules campaign was a driving force to improve our industrial rules.

 

“Our union is strongly engaged with the Change The Rules campaign; our members are fighting for the right of all workers to not be exploited in their work and to have access to a secure job with fair pay.”


Queensland Parliamentary Inquiry hands down recommendations

A Parliamentary Inquiry committee report recommending criminalising wage theft and changing laws to make it easier for workers to reclaim stolen wages, has been welcomed by Queensland Unions.


Queensland Council of Unions (QCU) General Secretary Ros McLennan welcomed the recommendation to create an industrial division of the Magistrates Court, which would make it easier for workers to pursue bosses for stolen wages.


“Wage theft is an issue that affects hundreds of thousands of Queensland workers, with a recent report identifying that about one in five Queensland workers is likely to have not been paid their full wages and entitlements,” said Ms McLennan.


Other key recommendations for the Australian government made in the report, include:

  • treating superannuation contributions like any employment entitlement,
  • automatic termination of “zombie” employment agreements at a certain date, and
  • a review of the Fair Work Ombudsman.

“The business practices of some major companies have been exposed as complicit in underpayment of workers. It can’t go on and the QCU supports action to end wage theft,” Ms McLennan said.

 

Read more about the Change The Rules campaign at www.changetherules.org.au

 

To download a copy of the McKell Institute report, visit https://mckellinstitute.org.au/research/reports/wage-theft-economic-distress/

Image credit: Young Workers Hub


Authorised by Terry Burke, Independent Education Union of Australia – Queensland & Northern Territory Branch, Brisbane.