Posted
Wage theft is becoming so systematic in Queensland,
it is estimated to be stripping almost $2.5 billion from the economy
every year, a parliamentary report has found.
Key points
- A parliamentary committee has found 437,000 workers are not receiving proper wages
- An audit of Fortitude Valley bars found 60 per cent of businesses are non-compliant
- The committee made 17 recommendations including the criminalisation of wage theft
The report estimated over 437,000 Queensland workers were not receiving their full wages.
Wage theft includes underpayment of wages, unpaid superannuation, withholding entitlements, and "sham contracting" or misclassifying employees as independent contractors to avoid employer responsibilities.
Committee Chair Leanne Linard MP said the committee overwhelmingly heard wage theft was imposing significant costs on Queensland workers, their families, businesses and the economy.
"Our report reveals that wage theft is costing Queensland workers up to $1.22 billion in lost wages and $1.12 billion in lost superannuation every year," Ms Linard said.
"Combined with an estimated $100 million reduction in consumer spending and $60 million in lost federal tax revenue, the overall economic loss could amount to almost $2.5 billion stripped from the Queensland economy every year."
Audits of Australian businesses by the Fair Work Ombudsman regularly found that up to one third were underpaying workers.
Wage theft has occurred among international students, backpackers, young people and temporary migrants, while hospitality, food services, retail, fruit and vegetable picking industries were "rife" with underpayment.
A July audit of Fortitude Valley bars and cafes found 60 per cent of businesses were non-compliant, with 33 per cent of breaches involving underpayment of the hourly rate and 12 per cent of breaches relating to the payment of weekend penalty rates.
Of 73 Fortitude Valley businesses audited over a three-day period, 76 breaches were identified and a total of $64,941 was recovered for 180 employees from 25 businesses.
Businesses 'may be non-compliant to remain competitive'
In a recent report on food precincts in Brisbane, the Fair Work Ombudsman stated that "businesses operating in high-density hospitality precincts may be adopting non-compliant practices to remain competitive".In some sectors, such as security, it has become part of the business model, exposing workers to systemic and sometimes severe exploitation.
Director of Ardent Security Brian McCarrick said competition was driving down prices and "business owners desperate to stay in business have to cut expenses to match revenue".
"The easiest target is to cut wages through underpaying the employees or non-payment of superannuation," Mr McCarrick said.
"Wage theft in the security industry is so far embedded that unfortunately it is becoming a business model."David Carter, a chef who appeared before the committee with the support of the Queensland Council of Unions, said every single person he knew who had spent a reasonable amount of time in the hospitality industry had wage theft stories.
"From being worked well and truly over your salaried hours, to penalty rates not being paid and superannuation not being paid … I do not know anyone who has spent more than a few years or has worked in a number of establishments who does not have wage theft stories," he said.
Like many chefs, Mr Carter has moved from job to job in different restaurants over more than 20 years.
A financial adviser went through Mr Carter's superannuation and found about half of the restaurants he had worked in had not paid the required superannuation contributions.
Many of those restaurants have since closed, so it is unlikely the missed superannuation contributions could ever be recovered.
After decades of work, Mr Carter found he only had $33,000 in superannuation.
"I am now in a position where I am seriously concerned about what I am going to do come retirement," he said.
Workers feel 'powerless' to reclaim lost wages
The committee heard that affected workers felt powerless to reclaim their lost wages and entitlements, with under-resourced federal regulators constrained in their ability to assist or to adequately enforce compliance."For the people affected, lost earnings can be a source of significant financial and emotional stress. Some workers reported experiencing anxiety and depression and having to borrow money to cover basic living expenses," Ms Linard said.
Photo:
The committee made 17 recommendations to improve system responses to wage theft. (ABC News: Sam Ikin)
"Vulnerable, lower income workers are over-represented among those affected by wage theft."
The report made 17 recommendations to improve system responses to wage theft, many of which are directed at the Federal Government.
The Committee recommended the Queensland Government conduct a public education campaign to assist in the fight against wage theft, working with the higher education sector to ensure international students had advice on workplace rights, including their right to join a union.
It also recommended wage theft be legislated as a criminal offence.
Queensland Unions have welcomed the recommendations with General Secretary of the Queensland Council of Unions, Ros McLennan, saying wage theft was a "scourge".
"Criminalisation of wage theft is a real deterrent for those employers and organisations that think ripping off their workers is a business model," she said.LNP members of the wage theft inquiry issued a statement of reservation about the recommendations.
"The LNP strongly maintains our opposition to union activism being taught in Queensland schools," the statement said.
"We have concerns about recommendations for a national labour hire licensing approach, given there has been no review of the effectiveness of Queensland's new laws.
"We also have concerns about making wage theft a new criminal offence as there are already existing criminal code offences that are sufficient and should be enforced."
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