2 mins read

FWO crackdown on hospitality industry unveils over $1.2 million in underpayments


The Fair Work Ombudsman has conducted spot checks in restaurants, cafés and catering companies throughout the country, finding over $1.2 million in underpayments in the process.

A total of 2,752 employees in 456 businesses were underpaid over $1.215 million, $386,000 of which came from the underpayment of 698 staff members in Victoria alone.

The spot checks, part of the “second wave” of the Fair Work Ombudsman’s National Hospitality Industry Campaign, saw 1,066 employers asked to hand over time and wages records covering 2012-13.

615 businesses were found to have errors, while 451 were found to be fully compliant with workplace obligations. Of those with errors, close to 20 per cent had made mistakes relating to weekend penalty rates.

“The majority of errors related to wage entitlements,” Fair Work Ombudsman Natalie James said in a statement.

“Employers were paying flat rates for all hours worked, which was often not enough to cover penalties, loadings and overtime.”

The results revealed a 58 per cent contravention rate; an outcome Ms James said highlighted the need for FWO intervention.

“According to recent data, this is an industry with a vulnerable workforce comprised largely of young employees and low-skilled employees,” Ms James said.

Recoveries as per state, according to the FWO, were as follows:

  • $386,389 for 698 employees in Victoria,
  • $355,980 for 846 employees in Queensland,
  • $282,996 for 788 employees in NSW,
  • $63,967 for 193 employees in SA,
  • $51,650 for 62 employees in WA,
  • $29,795 for 77 employees in Tasmania
  • $25,767 for 45 employees in the NT, and
  • $18,759 for 43 employees in the ACT.

The FWO said the hospitality sector has been under their spotlight since 2012 after 4,500 requests for assistance from employees was registered in 2010-11, along with a spike in the number of calls to the Fair Work Infoline and the amount of litigation against hospitality businesses.

A similar crackdown by the FWO in 2008 found $1.6 million in underpayments and entitlements.

Contributor to the CreditorWatch News Hub
14-Day Free Trial

Get started with CreditorWatch today

Take your credit management to the next level with a 14-day free trial.

You might also like

Media Release: Business Risk Index
Business conditionsBusiness Insights

One in 13 hospitality businesses facing failure in 12 months; B2B payment defaults hit record high

Labour Force Commentary
Chief EconomistCreditorWatch

Labour market weakens further in April

Hey, Wait…

Subscribe to our newsletter

You’ll never miss our latest news, webinars, podcasts, etc. Our newsletter is sent out regularly, so don’t miss out.