“Alarmed”: Fair Work Ombudsman uncovers 99 underpaid workers in joint ASIC probe

Fair work ombudsman (FWO) Sandra Parker says she was “alarmed to discover” the level of ignorance about workplace laws among first-time SME owners in a targeted audit.

The FWO has today released the findings from a 2017 initiative with corporate regulator ASIC, involving a probe of SMEs across Melbourne, which identified almost 100 underpaid workers.

The joint operation targeted 48 first-time directors located in and around Melbourne’s CBD, including in Balwyn, Carlton, North Melbourne and Port Melbourne.

While 26 of the audited businesses — stretching across the accommodation, food services, rental, hiring and real estate sectors — were found to be fully compliant with workplace laws, a further 22 found themselves in hot water.

In total $40,000 in underpaid wages was recovered for 99 workers, the largest lump sum being from a noodle bar that owed 14 employees more than $8,500.

Small businesses have emerged as a focus area for the FWO in recent years, although there has been widespread concern many directors find it difficult to understand and fully comply with Australia’s complex workplace laws.

Fair work ombudsman Sandra Parker said on Friday that ignorance wasn’t an excuse for underpaying workers.

“During our surprise visits of several Melbourne workplaces, we were alarmed to discover that many first-time company directors were not aware of their lawful obligations under Australia’s workplace relations laws,” Parker said.

“If you are new to running a business, it is your responsibility to ensure you understand your workplace obligations before you hire any employees.”

All 14 businesses who underpaid workers agreed to back-pay employees in full after being “educated” by Fair Work inspectors.

Eight infringement notices were issued, totalling $7,020 in fines relating to 11 payslip and record-keeping breaches.

Under a partnership announced in 2017, FWO inspectors obtained employee records from businesses and assessed compliance with relevant awards while ASIC analysts spoke with company directors about their duties and responsibilities under the Corporations Act.

Presentations were given about the resources available to small-business owners to help them remain or become compliant with workplace and corporations law.