Fair Work targets takeaway underpay

Spot checks by the Fair Work Ombudsman have discovered almost half of takeaway food outlets examined were not paying their workers correctly.

565 takeaway food businesses were asked to supply time and wages records for assessment. Just over half (53%) were paying their employees correctly, with only 33% found to be fully compliant with all pay slip and record-keeping obligations. 223 businesses were found to have short-changed 929 employees a total of $582,410, with one business owing its employees more than $35,000.

Acting Fair Work Ombudsman Michael Campbell said the results highlight the need for behavioural change and signalled that the hospitality sector would remain a ‘priority’ industry earmarked for ongoing education and support.

“Clearly, the takeaway food sector, an industry comprised largely of small businesses, is grappling with the complexity of the IR system, and few, it seems, are joining industry bodies to seek professional help and advice.

“It is important that major players in the hospitality sector, industry groups and intermediaries, such as accountants and lawyers, all play their part to help lift the levels of compliance above what we are seeing now.”

Campbell says the most common wage error identified was the underpayment of minimum hourly rates.

“Inspectors found some employers providing flat rates of pay for all hours worked, with many advising they had adopted this practice to simplify their payroll processes,” he said.

“In nearly one-third of cases, the hourly rate paid was not enough to cover hours attracting penalty rates and loadings, resulting in additional errors.”

A number of businesses were also inadvertently paying their staff under the Restaurant Industry Award instead of the Fast Food Industry Award because the business provided both takeaway and dine-in services.

Campbell says agency officials will continue to provide ongoing education and support to the hospitality sector to encourage and improve compliance levels. This will include presentations and information sessions for key stakeholder groups.

He urged hospitality businesses to use the online tools and resources available to them free of charge at www.fairwork.gov.au/hospitality and to consider joining a professional industry body such as the Council of Small Business of Australia (COSBOA).