Employment Law Handbook
Unpaid Wages
Although there is an importance in enjoying what you do for work, the underlying motivation for most people in going to work is money. Money is what allows you to purchase your living essentials and engage in your day-to-day activities, and unless you are fortunate enough to win a significant lump sum through the lottery, you will have to obtain employment and work to cover your living expenses.
In Australia, employers are obliged to provide their employees with at least the minimum standard of employment conditions as stipulated by a Modern Award, an Enterprise Agreement, or the National Employment Standards (“NES”), whichever is applicable in the circumstances. Within the minimum standard of employment conditions, there are of course provisions relating to the minimum level of pay that each employee is entitled. Unfortunately, it is not uncommon for employers to pay their employees at rates lower than the minimum amounts, either unknowingly or intentionally. It is imperative that all employees receive every last cent that they are rightfully entitled to and ensure that employers do not exploit their employees in vulnerable situations.
Upaid Wages Claim, Why and How?
How do you know if you have been underpaid?
Regardless of which metric your salary is calculated on, whether it be hourly, weekly, fortnightly, or annualised, the amount in wages you receive must be at least equal to or more than the relevant minimum wage applicable to you.
The relevant minimum wage which applies to you may be identified in a Modern Industry Award, Enterprise Agreement, or the NES depending on your occupation, employer, and industry. For example, a Retail Assistant at a typical store such as a supermarket or a fashion retailer will be covered by and subject to the provisions and protections as outlined by the General Retail Industry Award. Schedule B to this Award summarises the applicable minimum rates of pay for each classification of employee covered by the Award. Alternatively, a Retail Assistant at the well-known optical retailer OPSM will not be covered by the General Retail Industry Award, but rather by the Luxottica Distribution Centre Enterprise Agreement. Finally, an employee such as a Dentist is not covered by a Modern Industry, and provided that their respective employer is not bound by an active Enterprise Agreement with the Fair Work Commission (“FWC”), their only protections of minimum standards are pursuant to the NES. As such, it is imperative for you to understand which legal documents and guidelines determine the minimum standards of employment applicable to you, as this can have a great impact on the minimum wages you are entitled to.
Unpaid wages may occur in different shapes and forms, including:
- Unpaid or underpaid ordinary wages
- Unpaid or underpaid overtime wages (if applicable)
- Unpaid or underpaid superannuation contributions (currently, employers are obliged to make a minimum superannuation contribution of 10% of your salary)
- Unpaid or underpaid annual, sick, or personal leave entitlements
- Unpaid or underpaid benefits or bonuses in accordance with your employment contract (if applicable)
Although it is ideal and our wish for you to receive all payments of wages and other benefits that you are rightfully entitled to, it is always good practice to maintain records of all payslips and other relevant payment related documents for the purposes of storing evidence should complications arise.
What can you do to recover unpaid wages?
Should you come to the realisation that you have been underpaid to any extent by your employer, it is crucial that you take the necessary steps to recover all and any unpaid amounts, as this is your fundamental right as an employee. There are both informal and formal avenues and measures for you to exercise in your claim for unpaid wages.
The first, and most accessible method, of claiming unpaid wages is by way of a stern and firm Letter of Demand addressed to your employer. Paired with tangible evidence of your underpayment in the form of payslips and the such, pressure can be imposed upon your employer to immediately rectify their non-compliance with their obligations to provide at least the minimum standards of employment to you as an employee. Of course, engaging with a Solicitor and instructing them to prepare this Letter of Demand and send it on your behalf will contribute to establishing a much more dominant and compelling position as compared to a letter prepared and delivered by yourself.
Where a Letter of Demand, either from you personally or through a legal representative, does not result in your employer providing the unpaid wages owed to you or at least demonstrating some intention of coming to a resolution with you, you may wish to consider the following options, varying in costs and durations:
- Lodging a complaint to the Fair Work Ombudsman
- Commencing a small claims proceeding through the FWC, provided that the claimed amount is no more than $20,000
- Commencing litigation in the Federal Court of Australia
Useful Resources
- Modern Industry Awards
- Enterprise Agreements
- National Employment Standards
- Fair Work Act 2009 (Cth)
- Fair Work Commission at https://www.fwc.gov.au/
- Fair Work Ombudsman at https://www.fairwork.gov.au/
Park & Co Lawyers Employment Law Experts
Our team of Employment Law Experts and Park & Co Lawyers are strong advocates for the correct treatment of employees in any circumstance. We understand the immense toll that unpaid and underpayment of wages and benefits can have on you mentally and financially.
Should you require any assistance in relation to making a claim for unpaid wages, please do not hesitate to get in contact with our team.
