You have 0 free articles left this month.
Register for a free account to access unlimited free content.
Powered by MOMENTUM MEDIA
accountants daily logo

‘Workers lose $850m a year to wage theft despite FWO’

Regulation

Businesses habitually underpay workers and exploit the FWO’s limited resources, according to the McKell Institute.

By Christine Chen 11 minute read

Businesses are underpaying workers $850 million a year and the FWO recovers less than two-thirds of the lost wages, a study by independent thinktank the McKell Institute has found.

The institute said FWO data showed that over a quarter of the 60,000 businesses audited since 2009 had breached their wage obligations under the Fair Work Act 2009

Extrapolating this data, the institute estimated 269,728 businesses were robbing 1.38 million workers annually, or 11.5 per cent of the workforce.

==
==

The institute found that total unpaid wages amounted to approximately $847 million annually, multiplying the number of estimated affected workers by the average wages ($610) recovered per victim by the FWO.

CEO Ed Cavanough said actual wage theft could be as high as $1.35 billion since the data failed to capture the incorrect payment of penalty or award rates.

“This is an extraordinary amount of money being stolen and it’s unacceptable,” he said. “Being unaware is not an excuse. The onus is on employers to understand their obligations to their employees,” he said.

The economic flow-on effects of wage theft were also estimated at $330 million annually, using IMF multipliers.

NSW was responsible for nearly a third of total lost wages ($306 million across 500,000 workers), with Sydney-based businesses owing workers over $25 million, the highest amount recorded.

In Melbourne, over 28,500 workers missed out on nearly $17.5 million in wages.

“These horrifying figures are another blow for workers who are struggling to meet mortgage repayments, keep up with rising rents and pay their bills,” said Mr Cavanough.

In recent months, Best & Less, Woolworths, Bakers Delight, and Crown have all been subject to high-profile FWO action. 

The McKell Institute said that wage theft was “culturally ingrained” across many industries and that businesses habitually exploited the FWO’s limited resources and funding.

Executive director Rebecca Thistleton said that for every case the Fair Work Commission successfully prosecuted, “we know there are far more instances that are never investigated and workers who are never properly compensated”.

“It shows why we need strong laws to criminalise wage theft,” said Mr Cavanough.

This year, the Department of Employment and Workplace Relations undertook public consultations on national sanctions criminalising non-payment and underpayment across all industries. Currently, Victoria and Queensland are the only states to have criminal sanctions for wage theft.

 

Christine Chen

Christine Chen

AUTHOR

Christine Chen is a graduate journalist at Accountants Daily and Accounting Times, the leading sources of news, insight, and educational content for professionals in the accounting sector.

Previously, Christine has written for City Hub, the South Sydney Herald and Honi Soit. She has also produced online content for LegalVision and completed internships at EY and Deloitte.

Christine has a commerce degree from the University of Western Australia and is studying a Juris Doctor degree at the University of Sydney. 

You are not authorised to post comments.

Comments will undergo moderation before they get published.

accountants daily logo Newsletter

Receive breaking news directly to your inbox each day.

SUBSCRIBE NOW