Being “too busy and lazy” to keep records costs massage parlours $43k

A massage parlour operator in Adelaide who said he was “too busy and lazy” to keep proper records was penalised for contraventions of record-keeping and pay slip laws, following legal action by the Fair Work Ombudsman.

Ming Yuan Hu, who owns and operates a number of massage parlours in Adelaide, has been penalised $7200. In addition, Hu’s companies Wuyu Pty Ltd and 9th Sky Pty Ltd, have each been penalised $18,000.

The penalties, imposed in the South Australian Employment Court, are the result of legal action by the Fair Work Ombudsman, who audited Hu’s massage parlours in 2016 as part of unannounced visits to 19 massage shops in Hobart and Adelaide, which were conducted in response to concerns of non-compliance in the sector.

However, Hu responded by advising that the records requested by the Fair Work inspector were not kept and that staff were not issued with pay slips.

In an email to a Fair Work inspector, Hu stated that “During the past few years, I did not do the records and other things properly, because I am too busy and lazy”.

The contraventions occurred despite the Fair Work Ombudsman having previously put Hu on notice, during investigations in 2012 and 2014, of the need to comply with record-keeping and pay slip obligations under the Fair Work Act.

Deputy President Michael Ardlie found that the contraventions were serious, and said that the previous attempts to educate Hu came to nought.

“Proper record keeping and the provision of pay slips is essential to ensure there is compliance with workplace laws,” Ardlie said. “The failure to maintain relevant records frustrated the investigation process. Further, it is not known whether employees of the respondent suffered any specific monetary loss or entitlements in the absence of relevant records.”

Fair Work Ombudsman Natalie James agreed, saying Fair Work Inspectors often went to great lengths to reconstruct time and wage records when employers fail to comply with their obligations.

“In the past, our inspectors have translated hand-written diaries, used toll-road dates to reconstruct hours and camped outside businesses to observe when employees come and go, yet sometimes we are still unable to determine whether an employee has been paid correctly in the absence of proper records,” Ms James said.

James said that employers should be aware that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has now come into effect, which means a reverse onus of proof can now apply when the Fair Work Ombudsman pursues legal action in relation to underpayments that have occurred since the commencement of the Act.

“Now, employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove allegations in wage claims made in a court,” Ms James said.

“If an employee claims they have been underpaid and the employer didn’t keep the right records, make those records available, or give them a pay slip, the employer may need to prove that they did pay the employee correctly or gave them the right entitlements.”

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