Ombudsman case highlights importance of regular wage reviews for business owners

A Fair Work Ombudsman case in Australia highlights the problems businesses can get into if they don’t conduct regular wage reviews in line with fair work rulings

A South Australian worker who was paid just $15-an-hour for almost seven years is now being back-paid $22,000 following intervention by the Fair Work Ombudsman.

Fair Work Ombudsman Natalie James says the case highlights the importance of business owners reviewing staff pay rates periodically to ensure they are meeting their lawful obligations. SME owners should take particular note, as they are often so engrossed in making a success of their business and don’t have HR departments to rely on to deal with issues such as these.

The case involves a female employee who worked as a receptionist and shop assistant at a retail business on the Fleurieu Peninsula.

She was paid $15 an hour when she started as an 18-year-old in 2008 and was still on the same rate when she resigned in January, 2015.

The employee lodged a request for assistance with the Fair Work Ombudsman after being asked to train a new employee, who told her she was being paid $23.50 an hour.

Fair Work inspectors investigated and determined that as a casual employee under the General Retail Award, by 2015 she should have been paid $23.15 an hour on weekdays and $25.01 on Saturdays.

The business has co-operated with the Fair Work Ombudsman and agreed to a plan to back-pay the former employee in instalments.

‘Underpayment of hourly rates can result in employees being significantly underpaid if left unchecked for an extended period, which can leave businesses facing big back-payments they weren’t budgeting for,’ Ms James said.

Ms James says minimum pay rates generally increase on 1 July each year following the Fair Work Commission’s Annual Wage Review decision.

‘Employers sometimes overlook the need to adjust pay rates,’ she said. ‘They need to be aware that the Annual Wage Review decision increases not only the National Minimum Wage, but also base rates of pay in modern awards and enterprise agreements.’

Tools and resources available at include a Pay and Conditions Tool (PACT) that provides advice about entitlements.

Employers and employees seeking assistance can also call the Fair Work Infoline on 13 13 94. An interpreter service is available on 13 14 50.