Time to clean up its act: laundry business fined $90,000 for wage theft

With the Fair Work Ombudsman (FWO) keeping a close eye on employers to ensure they’re not steering away from promoting fair work practices, it’s imperative that business owners understand what their obligations are and the potential risk the business could face if they put a foot wrong.

In this article, we dive into a recent underpayment case that was successfully prosecuted by the FWO, the decision, and the lessons businesses need to remember from this.

Ninety-thousand reasons to stay compliant

Recently, four companies operating commercial laundry businesses under the name ‘South Pacific Laundry’ have been fined a total of $90,000 by the FWO for underpaying 22 employees. Notable, these fines were ordered by the Court regardless of the fact the businesses back paid the employees after the commencement of the FWO investigation. Deputy Chief Judge Mercuri concluded that imposing penalties was necessary to discourage other employers from engaging in similar behaviour. The underpayments were found to have occurred by neglecting overtime, weekend, and shift work penalty rates.

What can we learn from this decision?

Based on the reasoning behind the Commission’s decision, it’s clear that Fair Work has sought to provide this case as an example to all employers that whether small or large, any sort of underpayment or neglect of employee entitlements isn’t tolerated. It’s a reminder to all employers that it’s solely their responsibility to ensure their employees are compensated fairly and  in line with legal minimum standards.

What about you? Could you be underpaying your staff?

While you might not intentionally be incorrectly paying your valued staff, it’s important to regularly review your payroll to ensure you’re not accidentally underpaying your people. Consider the following questions:

• Does your business have a clear understanding of which awards or enterprise agreements apply to all employees?
• If you provide salaries to your employees, are you confident that the salary they are being paid adequately compensates for any award monetary entitlements?
• When was the last time your business conducted an audit, even a sample audit, to ensure compliance with award or enterprise agreement obligations?
• Do you believe that your business has the necessary expertise to detect and report any instances of non-compliance with award or enterprise agreement obligations?
• Have you established a whistle-blower hotline so that front-line employees can report any concerns about pay to management?

How can Citation HR help?

If finding time to manage your compliance is difficult, or you’re unsure whether you’ve got the basics right and would pass an FWO audit, there are cost-effective solutions available to you. Citation HR can conduct a thorough compliance audit of your business which will uncover any risks and provide measures to get your compliance up to scratch.