Court slaps employer with 6-figure penalty after defrauding South Korean worker

Employer ripped off worker through cashback scheme

Court slaps employer with 6-figure penalty after defrauding South Korean worker

In a recent federal court case, an employer repeatedly ripped off its worker through a cashback scheme, to the point where the employee found herself deceived and financially incapacitated.

According to the Federal Circuit and Family Court of Australia, the South Korean worker decided to pursue a permanent residency in Australia and worked in a beauty salon where she met her employer.

Her boss, with whom she was already acquainted through a mutual friend, offered to hire the worker full-time and sponsor her in her visa application.

"If you are working for me, I can support you," the employer said. "You will be responsible for your own expenses, and I will be responsible for mine. So your expenses could include your income tax and your lawyer's fee."

Repaying wages

During the worker's employment, her boss required her to repay some of her wages to cover leave entitlements and other amounts related to her visa, training fees, accountants' fees, and many more.

"She deposed that at first she did not ask any questions about these payments because she did not want to made issues for her visa, or harm her working opportunities in Australia," the Court noted, referring to the worker.

It was only when the worker noticed that the tax proportion of her weekly wage was increasing that she asked her employer to provide her with payslips.

However, the employer only answered to the effect of "If you are willing to pay my accountant, you can get a payslip" and "I am doing so much for you, as your working visa sponsor, you will get permanent residency, if you are asking me all these questions and being difficult, it's not good.”

In its decision, the court said that the worker was forced to subsidize the employer and her business by making payments amounting to $105,609. It further noted that during the employment period, the worker was underpaid by more than $50,000.

Court’s decision

Ultimately, the court found the employer guilty of violating workplace laws because of regularly and intentionally failing to issue payslips, issuing the worker with false payslips, and failing to make and keep records.

It also ordered the employer to pay the worker over $291,000 in penalties and back payment after financially torturing the South Korean worker.

Federal Circuit and Family Court judge Robert Cameron also noted that despite the severity of underpayments, he felt no remorse from the employer in relation to her mistreatment of the worker.

"I accept that it is important that penalties be set at a level such that they are not an acceptable cost of doing business, and so tend to discourage repetition or emulation of the contraventions considered in these reasons," Cameron said. 

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