Wage theft is back in the news this month following reports of BHP underpaying 30,000 of its employees. These underpayments, dating back to 2010, were due to an average of six leave days being incorrectly deducted from affected employees.

The financial implications for the Melbourne based mining, metals, and natural gas petroleum juggernaut are substantial, with BHP estimating it will cost around $400 million to pay back employees. That’s before any penalties that may need to be paid if the investigation by the office of Fair Work Ombudsman Sandra Parker finds there has been a breach of employment law.

It’s the latest high-profile case to put wage theft under the spotlight. Commonwealth Bank and Commsec are currently under investigation by the Ombudsman’s office, for allegedly underpaying 7000 employees by a total of $16 million. Super Retail Group, Qantas, Westpac and David Jones have also come under the Ombudsman’s microscope for alleged underpayments.

“It's an issue that's certainly not going away," Parker told ABC Radio National. "On a positive note, it's good that the companies are waking up. and it's good that they're auditing and it's good that they're making good. But it is taking a long time and it's a frustrating process."

Suncorp is an example of this. It underpaid more than 15,800 employees between 2014 and 2022. The inconsistent use of ‘Rostered employee’ and misunderstandings of appropriate entitlements led to the underpayment of entitlements including overtime, shift loadings, weekend penalties, annual leave loading, public holiday loadings, minimum rate of pay, long service leave, redundancy, payment in lieu of notice, meal allowances and superannuation.

Suncorp first identified underpayments after commencing an internal review into specific pay and leave practices and its rostering systems.

Federal government cracking down on wage theft

Wage theft is an issue that all companies large and small need to be increasingly aware of, and not only because of the severe financial and reputational damage they can suffer if they are found guilty of it. The Federal Government is currently considering reforms that would follow in the footsteps of Victoria and Queensland in cracking down on wage theft. Those reforms could see individuals such as directors and HR managers facing imprisonment and penalties up to $825,000 per breach.

Ensuring that every employee is paid correctly – which includes providing them with the correct leave entitlements, as well as penalty rates where applicable – is not merely a matter of organisational justice. It’s at the very foundation of businesses operating ethically and compliantly within the Australian employment landscape.

Australian employment law is among the most complex in the world. What’s more, it recently has undergone the most significant changes since the introduction of the Fair Work Act in 2009. It is therefore more essential than ever to have rigorous checks and balances in place. A spot check or audit by an external consultant can be a good place to start.

As part of our suite of expert workplace relations services, Acclaimed Workforce can provide initial spot checks or comprehensive wage audits to ensure your business is compliant. Contact us today to find out more.