Small business warning on underpaying staff

The Fair Work Ombudsman is taking legal action against a nail salon for alleged underpayment of workers by more than $50,000.

This has prompted a warning to small business owners about exploitation of migrant workers, particularly from their own communities.

FWC alleges two Filipino nail technicians aged 20 and 21 at the time of the offences, were underpaid a total of $53,021 between November 2014 and March 2016 by their Adelaide employer.

Inspectors found that the employees were allegedly paid less than the applicable minimum hourly rates in the Hair and Beauty Industry Award 2010.

Under the Award 2010 at the time, they were entitled to $18.97 to $19.44 for normal hours and penalty rates ranging from $23.71 to $38.88 for weekend work.

It is alleged that the business owner and his company failed to apply loadings and also breached workplace laws by knowingly providing inspectors with false and misleading records that significantly understated the hours the employees had worked, creating an appearance that they had been paid much higher rates than was actually the case.

“We treat cases involving underpayment of migrant workers particularly seriously because we are conscious they can be vulnerable if they lack awareness of their entitlements and are reluctant to complain,” Fair Work Ombudsman Natalie James, said.

“I am increasingly concerned about the number of employers from culturally and ethnically diverse backgrounds who are exploiting workers from within their own or other ethnic communities.

“This case is another chance to make it clear that the lawful obligations to pay minimum rates apply to all employees – and employers – in Australia and they are not negotiable.

“I understand there are cultural challenges and vastly different laws in other parts of the world, but it is incumbent on all businesses operating in Australia to understand and apply Australian laws."

Employers and employees seeking assistance can visit or phone 13 13 94. An interpreter service is available by calling 13 14 50.

Information to assist people from culturally and linguistically diverse backgrounds has also been translated into 30 languages and is available on the website.

The Fair Work Ombudsman’s Pay and Conditions Tool (PACT), available on the website, can assist business owners to calculate pay rates applicable to their business and templates for pay slips and time-and-wages sheets are available for free download.

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