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Diners in Sydney’s A-list suburbs are unknowingly exploiting an underclass of employees who are being grossly underpaid, Fairfax Media has found.
Widespread cash-in-hand payments are resulting in hospitality workers being paid more than a third below the minimum wage, which is currently $15.96 per hour.
Fairfax has established restaurants in Manly, Neutral Bay and the northern beaches are paying employees as little as $10 an hour in cash.
The investigation has found the Sushi Bar Taka in Manly paid employees $10 an hour, Sushi Train in Neutral Bay was paying some employees $13 an hour and a northern beaches restaurant was paying $12 an hour.
With loadings and other entitlements, the workers are missing out on up to half the mandated salary they are entitled to.
A spokesman from Sushi Bar Taka said it was ‘‘not correct anyone was getting $10 an hour” but would not say what the hourly rate was, while a spokesperson at the Sushi Train refused to comment.
An underpaid Sydney hospitality employee, who asked not to be named, was recently burnt by boiling oil at work. The splashing oil hit the employee’s arms and face, causing scarring. When the employee took it up with the employer, the manager said the business didn’t have insurance. ‘‘It didn’t surprise me that they didn’t have insurance, when I know they underpay,’’ the employee said.
‘‘Everyone [who] works there didn’t know about the wage system, but they don’t complain because they don’t know about it.’’
Jacqui Swinburne, the employment solicitor from Redfern Legal Centre, said employees were being ripped off in Sydney restaurants and the fast food industry in a practice that was ‘‘widespread’’.
‘‘I have been really shocked by the underpayments,’’ Ms Swinburne said, who has worked at the legal centre for 10 years.
Ms Swinburne said owners often targeted international students who were unaware they were being exploited or paid below the minimum wage until they were dismissed.
‘‘Owners are making huge profits while they are exploiting people at the same time,’’ she said.
Andrew Edwards, a Fair Work Ombudsman investigator who regularly inspects conditions in restaurants, said it was common to find overseas students in particular working for cash in hand once they reached their 20-hour-per-week limit specified by their visa.
‘‘People find themselves in circumstances where the employer wants to give them more hours, but says ‘Let’s do it in cash because you’ve got this visa,’’’ he said.
Mr Edwards said he’d seen rates of between $10 and $8 for hospitality workers. ‘‘We’ve seen rates as low as that.’’
But John Hart, chief executive officer of the Restaurant and Catering Australia Association, said it was the restaurant owners who were getting the raw deal, not the employees.
"The owners businesses are being pushed to the wall where they can’t even afford to not be in their businesses,’’ he said. ‘‘They have to work every weekend because they can’t afford to hire staff to work on the weekend.’’
Mr Hart said it was an ‘‘employees’ market’’.
‘‘They get to choose where they pick work and they get paid incredibly well and that’s the way it is."
Mr Hart did however concede that an estimated 50 per cent of businesses were not compliant with regulations.
"They are opting out of the system and if they stay in the system they are going to go broke," he said.
“It’s a huge problem because the system is forcing them to pay cash in hand. The system is making them go back to opting out.’’
He said it was the smaller, medium restaurants who were not complying.
"The end market... they are the ones under pressure and they are the ones who opt out and they can opt out. They are not in the spotlight."
Among those to complain to the Fair Work Ombudsman, is Yuka Odashima, a Japanese student who until recently worked at the Melbourne Japanese bar and restaurant group behind Nama Nama, Hihou and Izakaya Den.
A recent payslip for the 25-year-old shows she is being paid a flat rate of $15 per hour, plus superannuation.
Ms Odashima said the correct rate, according to the Fair Work Ombudsman, would have been around $21 an hour for much of her work.
‘‘It’s a really busy restaurant and bar and I am pretty sure they can pay proper salary to all staff but they don’t,’’ she said. ‘‘I asked the manager why they pay just $15 and he just started getting angry. He said ‘You can just find another job’.’’
She stopped being given shifts soon after this conversation, she said.
Ms Odashima conceded that she often got tips that supplemented her wage.
One of the restaurant group’s owners, Simon Denton, said Ms Odashima had not been taken off the group’s rosters because she had questioned her pay, but because she was not needed.
And he said his restaurant paid far better than many others. Many of his staff worked for restaurants that had paid them $10 an hour, he said. ‘‘A lot of the people who work for us work for other places for a hell of a lot less,’’ he said.
The Fair Work Ombudsman is now assessing the case.
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