Ever because the economy-wide prevalence of wage theft by employers has been a matter of public consideration, employers and employer teams have insisted it’s as a result of the economic relations award system is simply too complicated.
Even in any case these years as companies massive and small — together with a lot of the nation’s most well-known corporations, universities and even the ABC — have been outed or confessed they’ve ripped off their employees, they insist it’s as a result of awards must be stripped down (stripped down of protections for employees, that’s, however that’s a separate difficulty).
Simply earlier than Christmas, the Enterprise Council of Australia — the place 40% of the membership is responsible of wage theft — was nonetheless peddling the “complexity” line in a submission to the Honest Work Fee (FWC).
“Underpayments are fairly often the results of unintended errors as a result of complexity of the awards,” the BCA instructed the FWC’s award evaluation course of. “If Australia needs to cut back underpayments, award high quality, consistency, complexity and subjectivity must be acknowledged and addressed.”
You’ll be able to perceive small companies, notably sole-owner enterprise, fighting the paperwork of awards in, say, a retail outlet or café. However the BCA’s members are among the many largest corporations in Australia and the world. Many have HR departments with a number of hundred employees (BHP’s and the Commonwealth Financial institution’s HR departments quantity properly over 1,000) however someway find yourself underpaying employees because of award complexity.
If complexity is such an important difficulty in wage theft, it ought to apply throughout the entire financial system, and to all employees wherever they’re lined by these complicated awards. However wage theft shouldn’t be a good phenomenon. Surprisingly for one thing that’s allegedly pushed by the supply doc of the related award, wage theft appears extremely depending on whether or not a employee is a migrant with a poor command of English somewhat than award complexity. In accordance with the Honest Work Ombudsman’s (FWO) most up-to-date annual report:
Migrant employees make up round 7% of the Australian workforce, but they’re overrepresented in our compliance and enforcement work. In 2022-23 they accounted for: 17% of all formal disputes accomplished; 19.5% of all nameless reviews obtained; 15% of all litigations initiated.
Neither is this new. In 2017-18, the FWO reported “migrant employees and visa holders proceed to be considered one of probably the most susceptible employee cohorts, and are frequently overrepresented in disputes in addition to our compliance and enforcement outcomes. Whereas migrant employees make up 6% of the Australian workforce, they account for 20% of all formal disputes accomplished by the FWO in 2017-18.”
If, because the Enterprise Council and its lengthy listing of wage thieves is true and wage theft is right down to award complexity, it’s unusual that it appears to hit migrant employees at a price of between two and thrice that of native employees.
Maybe migrant employees are clustered in industries which have notably complicated awards? The BCA’s examples of award complexity are practically all from the hospitality and retail sectors, and certainly that’s the place many migrant employees are employed (particularly overseas college students): the FWO says lodging and meals providers (37%) is probably the most complained about trade by migrant employees, whereas retail is the third most complained about. And people industries dominate the FWO’s nameless tip-off service: “Throughout all reviews, the dominant industries have been hospitality and retail, involving 34% and 13% of all nameless tip-offs respectively.”
However different sectors additionally appear to have lots of unintentional wage theft allegedly attributable to sophisticated awards. The FWO devoted a complete part of its annual report back to contract cleansing, noting: “The contract cleansing trade was a precedence for the [FWO] in 2022-23 as our intelligence continued flagging the trade as high-risk for noncompliance. Elements making this a high-risk sector embody `a workforce that contains of largely migrant, low-paid and part-time employees — all categorised as susceptible as a result of they’re at better danger of exploitation”.
No point out of the complexities of contract cleansing awards by the BCA.
Equally, agriculture “continues to current as a high-risk sector for employee exploitation, because of, amongst different options … the traits and tradition of the workforce (comprising many younger visa holders with little understanding of their office rights in Australia)”. In truth, the FWO simply accomplished a two-year enforcement technique in agriculture to attempt to curb exploitation in that sector.
Nor does the “it’s due to complexity” line clarify why the extent of wage theft falls inconsistently throughout totally different migrant teams. In a report on exploitation of migrant employees final 12 months, Brendan Coates and his group on the Grattan Institute identified “working holidaymakers and college students usually tend to be underpaid than momentary expert migrants. Employees who struggled with English have been extra prone to report a adverse work expertise, reminiscent of discrimination, issues with their pay, or strain to work exterior their visa situations. Girls have been extra probably than males to report cases of sexual harassment.”
Complexity strikes in mysterious methods, it appears.
And wage theft additionally displays how lengthy a migrant employee has been right here: “We estimate that latest migrants — those that arrived in Australia inside the previous 5 years — are twice as prone to be considerably underpaid than long-term residents. In 2022, between 5% and 16% of employed latest migrants — or 27,000 to 82,000 folks — have been paid under the nationwide minimal wage. And between 1.5% and eight.5% of employed latest migrants — between 6,500 and 42,000 folks — have been paid a minimum of $3 an hour under the nationwide minimal wage.
“Migrants who’ve been in Australia for longer, and usually tend to have secured everlasting residency, are much less prone to be underpaid.”
Time, maybe, for the BCA to cease treating us as fools and blaming systematic exploitation of probably the most susceptible awards on regulation, somewhat than pure greed and opportunism on the a part of employers?
Ought to employers who exploit their employees face greater penalties? Tell us by writing to letters@crikey.com.au. Please embody your full identify to be thought of for publication. We reserve the fitting to edit for size and readability.