Salon charged over alleged exploitation of hairdresser via “cashback” scheme

hair salon

The former operators of a Sydney hairdressing salon is set to face court action for allegedly underpaying a worker through cashback payments.

According to the Fair Work Ombudsman, Yeon Beauty Salon Pty Ltd, which operated the Yeon Art Hair salon in Eastwood, and the company’s sole director and manager Mi Yeon Ha, breached the Fair Work Act 2009 by requiring the worker to repay more than $100,000 of her wages and entitlements in cashback payments.

The employee, a South Korean national, was sponsored by Yeon Beauty Salon on a 457 skilled work visa to work as a hairdresser at the salon between 2015 and 2019.

The company also allegedly underpaid the worker her minimum wage rates, a tool allowance, leave entitlements, and entitlements for weekend, public holiday and overtime work under the Hair and Beauty Industry Award 2010 and the Fair Work Act.

The worker was allegedly underpaid a total of $169,266. Additionally, the FWO noted that the salon never made and kept records and resorted to issuing false and misleading payslips on some occasions, and on others not issuing the employee any payslips at all.

Under the reverse onus provisions of the Protecting Vulnerable Workers amendments to the Fair Work Act, Yeon Beauty Salon will be required to disprove a number of the allegations if they contest the matter in court.

“The Fair Work Ombudsman will use all powers available to us to hold business operators to account when we encounter serious allegations that involve vulnerable workers,” Fair Work Ombudsman, Sandra Parker, said.

The FWO is seeking court-imposed penalties against Yeon Beauty Salon and Ha and court orders requiring them to pay the worker $169,266 in compensation and back-payments, plus interest. The company faces maximum penalties of up to $63,000 per contravention while Ha faces maximum penalties of up to $12,000 per contravention.

A directions hearing is listed in the Federal Circuit Court in Sydney on 4 June 2021.