If the Australian Taxation Office caught more than 400 ACT businesses underpaying their employees superannuation to the tune of $7 million, how many more are getting away with it?
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It's called the "superannuation guarantee" for a reason. But as the spotlight hits a growing number of businesses either purposely or mistakenly not paying wages correctly, the government needs to step up and take swift action to increase penalties and implement more rigorous checks to curb the problem.
The revelation of the extent to which ACT workers are being underpaid superannuation, published in today’s Sunday Canberra Times, offers but a glimpse of the wage theft epidemic in the territory.
In recent days, Lush cosmetics has been revealed as the latest company to underpay its workforce by $2 million over eight years. The company touts itself as an ethical brand, and apologised profusely when it realised the mistake. It announced the large-scale error after an internal investigation.
However, that mistake left some Lush staff members as much as $10,000 out of pocket.
The company attributed the issue to inefficiencies in its payroll system during the 2010 transition to the Fair Work Act’s system of modern awards, the basic wages safety net affecting most workers.
While wage theft hurts workers immediately, withholding super contributions packs a longer-term pain. Less super ultimately means more money in pensions, costing the government in the long run.
To gain an insight into the scale of wage theft, a Senate inquiry last year handed down a report on corporate avoidance of the Fair Work Act 2009.
The report stated while the committee didn't hear direct evidence on the scourge of superannuation underpayments, it had been widely reporting that the problem was costing 2.7 million workers an average of $2,025 a year.
One of the 29 recommendations in the report was to substantially increase penalties for wage and superannuation theft to provide a more effective deterrence.
"A combination of more likely discovery and higher penalties for offending companies would be beneficial to the community as it would create a level playing field and remove the current competitive disadvantage that complying employers suffer in industries where wage theft is widespread," the recommendation read.
But what to do if you think you're being rorted by your employer? Follow the steps on the ATO website, which ask the worker to recognise the problem and take steps to get a resolution. Don't fall into the false sense of security that the "superannuation guarantee" is guaranteed.
