Fair Work Ombudsman investigates wage theft in Sydney’s food precincts

By ERIN MODARO

The Fair Work Ombudsman (FWO) has operated an investigation into fair pay across Sydney’s eateries and food precincts. Last month the Ombudsman announced in a statement that they would be conducting surprise visits to over 50 businesses in the areas of Haymarket, Chinatown, Darling Harbour, Barangaroo, Surry Hills and Darlinghurst.

Fair Work inspectors are investigating the eateries to ensure hospitality and food workers are receiving fair pay and are not being subject to wage theft, after anonymous submissions were made regarding “potential breaches of workplace laws” in Sydney.

Sandra Parker, the Fair Work Ombudsman, said in a statement that the focus of the investigations would be into eateries that employ visa workers.

“Our intelligence indicates inner Sydney food precincts employ many visa holders, who may have limited English skills or understanding of their rights, making them vulnerable to exploitation” Ms Parker said.

Media release: Sydney eateries face pay investigations https://t.co/zEToPm1qTa

— Fair Work Ombudsman (@fairwork_gov_au) June 2, 2022

2022 Report finds hospitality sector least compliant with Fair Work laws

A report by the Senate Economics References Committee was released in March of this year and outlined a concerning state for hospitality workers in Australia, after a 2019 inquiry into breaches of fair work laws was conducted.

The background of the report found that there has “long been reported instances of unlawful underpayment or nonpayment of employee wages and entitlements—sometimes referred to as ‘wage theft’—in Australia”.

Recommendations from the report include amendments to the Fair Work Act 2009, including an “increase in civil penalties for wage theft”, and increased penalties to parties involved in the facilitation of environments where wage theft is allowed.

The Senate Economics References Committee also reported that 2020 investigations made by the FWO found that 60% of audited business in the hospitality sector were “non-compliant” with fair work laws, and that the hospitality industry was the least compliant of all investigated sectors, with 61% of audited workplaces not meeting fair work standards.

The report detailed that the during 2020-2021 audits, the FWO “found non-compliance rates of between 78 and 88 per cent in hospitality businesses and recovered over $1 million in wages for 931 workers”.

The Senate report doesn’t represent the only alarming results of investigations into wage theft in hospitality; The ‘Hospo Voice’ hospitality workers union released a 2020 report titled #RebuildHospo, which outlined insecure work exacerbated by Covid-19.

The #RebuildHospo report complied statistics from the pandemic, finding that 82% of workers surveyed were subjected to wage theft either in their current or previous hospitality job. The report determined that wage theft was most common in the forms of unpaid super, being paid cash in hand and being paid below award minimum.

In regards to workers on temporary visas, the hospitality workers union stated in the report that “migrant workers and international students on temporary visas have been the hardest hit by the COVID-19 pandemic”, with 94% of these workers facing job losses or having their hours cut.

Nation-wide Investigation by FWO into hospitality wages

The surprise audits this week are a part of a nation-wide investigation by the FWO, which has previously audited in Melbourne, Brisbane, Sydney, Adelaide and Perth, Darwin, Launceston, the Gold Coast, and most recently, inner south Melbourne.

Findings from these reports have revealed that over $189,000 in underpayments were recovered for 306 workers in Adelaide’s Chinatown alone. The FWO also reported that nearly $2 million of court-ordered penalties were doled out in the fast food, restaurant and cafe sector, with visa workers being involved in “32 percent of all litigations that year”.

Ms Parker reinforced the commitment to ensuring visa workers in hospitality are lawfully paid, saying that “all employees have the same basic workplace entitlements, regardless of nationality and visa status”.

“Protecting vulnerable employees such as visa holders and improving compliance in the fast food, restaurant and café sector are ongoing priorities for the Fair Work Ombudsman,” Ms Parker said.