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**What are the risks of underpaying your staff?

I’m Chris Campbell from Aitken Legal. As an employment lawyer, I am often required to speak to employers about the risks of underpaying employees.

Underpayment of wages has been an extremely topical issue in employment law over the past 3 or 4 years. Most recently, Queensland has introduced the criminal offence of wage theft, with jail time a potential outcome of prosecution, further underlining the serious stance being taken against employers who do not pay their employees correctly.

The Fair Work Ombudsman has also shown an increasing appetite for prosecuting employers who fail to meet their minimum obligations under relevant Awards and the Fair Work Act. Whilst claims of underpayment by employees can often be successfully resolved through early intervention and negotiation with employees, where those underpayments relate to vulnerable employees, such as overseas workers or young workers, the Fair Work Ombudsman has been seen to certainly take an aggressive approach to prosecution.

In circumstances where the FWO does decide to prosecute, not only will it seek to have the underpayment rectified, but it will often request that civil penalties be ordered against the employer. At the time of recording this video, the maximum civil penalty that can be imposed against a corporation who has contravened an Award or the Fair Work Act by underpaying an employee is $66,600 per breach. For individuals involved in the contravention, the maximum penalties are $13,320 per breach. This is applied per employee. Recent caselaw has shown the Fair Work Ombudsman’s appetite to include Directors, Human Resource Managers and in some circumstances, Accountants, in the prosecution where they are involved in these breaches and seek penalties against them personally.

Accordingly, we strongly advise that if you receive an underpayment claim from an employee, seek legal advice promptly so that the claim can be assessed; advice provided, and you can take the necessary steps to reduce the risk of prosecution by the Fair Work Ombudsman or legal proceedings being commenced by the employee directly.

Being proactive is very important. Do regular audits of your wage records to ensure employees are being paid correctly. If at any time you think you may be underpaying your employees and wish to obtain clarity in relation to your obligations, please contact one of the lawyers at Aitken Legal.

#employmentlaw #underpaymentofwages #fairworkact #wagetheft

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