A joint report undertaken by the University of Technology Sydney and the University of New South Wales has found that the underpayment of foreign workers – backpackers and international students – is more widespread than previously thought.

4, 322 respondents were interviewed in the recently released survey, showing that wage theft is commonplace throughout Australia.

The survey found that a quarter of the international students surveyed earned $12 per hour or less, and 43% of students earned $15 or less in their lowest paid job.

The situation was similar for backpackers in relation to their lowest paid jobs. A third were found to earn $12 per hour or less, and almost 50% reported earning $15 or less.

Workers were also aware of the unfair conditions, and New South Wales was the state where the far majority of participants worked their lowest paid job (57%; 1, 936 respondents). This was followed by Victoria (17%; 585 respondents) and Queensland (12%; 397 respondents).

Asian workers were the most common victims (hailing from countries such as China, Taiwan and Vietnam), and outnumbered underpaid workers from the UK, Ireland and North America.

Payroll corruption under the spotlight

This scandal, as well as numerous others arising this year and last year have resulted in a crackdown of wage theft throughout Australia. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 was passed in September with a view to amend the Fair Work Act 2009.

There will be increased penalties for ‘serious contraventions’ of workplace laws as well as any breaches of record-keeping and pay slip obligations.

A significant change includes the fact that where employers fail to meet relevant record-keeping and pay slip obligations without a reasonable excuse, the onus of proof will be reversed against employers. This means that employers will need to disprove wage claims made in court.

Other changes include stronger Governmental powers to collect evidence in investigations, and a prohibition on cashbacks.

The importance of compliance

The release of this joint survey will further fuel the flame surrounding payroll compliance in Australia. The Fair Work Amendment Bill 2017, coupled with the Budget Savings (Omnibus) Bill 2016, has only added to the anxiety of employers when it comes to paying staff.

For businesses to ensure they do not find themselves on the receiving end of an increased penalty, or worse, in court attempting to disprove wage claims, employers should be exceptionally wary of their payroll processes.

Businesses must be STP compliant beginning July 2018, and any discrepancies noticed by the ATO could result in any one of the penalties / consequences outlined above.

foundU provides a dependable solution for businesses safeguarding against ATO challenges. The foundU platform is 100% STP compliant, and includes automatic EBA and award interpretation, preventing any staff underpayment.

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