New analysis has revealed Australian workers are being underpaid nearly $850 million a year.
The analysis by the McKell Institute looked at Fair Work Ombudsman (FWO) business audit campaigns dating back to 2009.
Their analysis found more than 40 per cent of the businesses audited fell foul of the Fair Work Act, while more than a quarter recorded breaches of monetary obligations such as award rates and agreements.
Extrapolated across Australia, this equates to 269,728 businesses collectively ripping off more than 1.3 million workers, or roughly 11.5 per cent of the country’s workforce, a collective $847.25 million annually.
McKell Institute CEO Ed Cavanough said the estimates were at the lower end, because the analysis did not account for cases where workers were underpaid against appropriate award rates or the incorrect payment of penalty rates.
“The analysis puts a conservative figure on the cost of wage theft that is rampant across Australia, equivalent to a 0.01 per cent loss in GDP,” Mr Cavanough said.
The FWO generally found employer non-compliance was due to a lack of awareness and understanding of award provisions, rather than employers acting maliciously.
“The total amount of actual wage theft is likely much higher. This is an extraordinary amount of money being stolen and it’s unacceptable. Being unaware is not an excuse. The onus is on employers to understand their obligations to their employees,” Mr Cavanough said.
“It shows why we need strong laws to criminalise wage theft, like the protections being pursued through the federal government’s workplace reforms.
“These horrifying figures are another blow for workers who are struggling to meet mortgage repayments, keep up with rising rents and pay their bill.”
The McKell Institute is calling on the federal government to introduce strong laws to criminalise wage theft, and to provide more funding to the FWO to enforce these laws.
The Institute is also calling on employers to take steps to ensure they are complying with their workplace obligations, and to provide their employees with information about their rights.