Random audits conducted by the FWO have found more than 70% of Victorian brothels are in breach of workplace law.
With workplace contraventions found in 44 of the organisations, it was found that 19 had collectively underpaid 51 of their employees a total of $65,508. The largest individual underpayment was $12,800 for 10 employees. In addition to underpayments, some were found to have misclassified employees as independent contractors.
Record-keep contraventions included failing to include required information on pay slips.
Key HR takeaways
While underpayments continue to be found across many industries in Australia, there is still something for HR to learn from every case. The following factors provide takeaways for all HR pros:
In this case, the FWO consulted with the Australian Adult Entertainment Industry Inc (AAEI), as well as The Resourcing Health and Education in the Sex Industry (RHED), Australian Federal Police (AFP), Victoria Police Sex Industry Co-ordination Unit and Victorian Department of Justice Business Licensing Authority.
HR pros worried that they may be underpaying workers should look to consult with equivalent bodies in their industry to ensure they are above the board, and if not move to remedy their problems before the FWO does it for them.
Move to fix mistakes
As in a number of other cases, once the mistakes were found employers worked with inspectors to rectify them voluntarily. If an organisation finds itself in breach of workplace law, it is important to work together with the FWO to remedy these problems, communicating that these were indeed genuine errors and not deliberate attempts at underpayment.
Scrutinise job classifications
The FWO sent inspectors to observe the work of managers and receptionists, finding that their work fell within the scope of the Clerks – Private Sector Award (2010) an ‘occupation-based’ Modern Award.
“Although receptionists and brothel managers may spend some time undertaking ancillary duties that are not clerical in nature, the primary purpose of their engagement is to perform duties which are clerical,” Fair Work Ombudsman Natalie James stated.
It is important HR properly assesses and defines jobs within their organisation to ensure the appropriate award, thereby avoiding the possibility of breaches via misclassification.