New report says wage theft remains a 'significant issue' in Australia
More than $1.76 billion was repaid to Australian employees in the past five years due to cases of wage theft, according to a new report
Reckon's Wage Theft Radar analysed data from the Fair Work Ombudsman from the past five financial years to discover the impact of wage theft across Australia.
It found that employers had repaid $1,758,190,840 to underpaid employees, while infringement penalties reached $2,794,764 in the past five years.
According to the report, there was a 282.2% increase in the total amount of money repaid to workers in the past years.
"Penalties paid for breaking the rules increased by 52.8%, from just over $477,000 to $729,000," it added.
Wage theft still a 'significant issue'
The huge repayments and penalties come amid the prevalence of wage theft across Australia in the past five years, according to the report.
During the period, the FWO carried out 16,701 investigations for wage theft, with 9,401 businesses found non-compliant.
A further 266 businesses self-reported to the FWO after being made aware of underpayment issues.
"Our research reveals that wage theft continues to be a significant issue across Australia," said Sam Allert, Reckon CEO, in a statement.
"The scope of this issue is highlighted by the $1.76 billion that was repaid to workers, emphasising the far-reaching consequences for businesses that fail to comply."
Highest wage theft cases
According to the report, the Northern Territory logged the highest rate of wage theft reports and non-compliant businesses per 100,000 in Australia.
"This is especially notable given the small number of businesses in the region," the report read.
"Tasmania and Queensland also have high rates of non-compliance, with 241.7 and 236.1 businesses per 100,000, respectively."
Meanwhile, the public administration and safety industry recorded the highest rate of non-compliance per 100,000 businesses, with 932.3, followed by accommodation and food services.
However, the highest average value recovered per non-compliant business was in the Mining industry, with over $4 million recovered.
Allert said businesses can protect themselves by regularly reviewing payroll systems, staying informed about regulations, and addressing any discrepancies promptly.
"By implementing robust compliance frameworks, investing in ongoing training, and utilising technology, businesses can not only avoid the costly consequences of non-compliance but also build a strong level of trust with their employees, ensuring a fairer and more sustainable work environment," he said.
The Federal government recently criminalised wage theft across Australia, meaning employers who deliberately underpay workers can face criminal charges.
