Hefty penalties apply for undercutting wages

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Posted February 21, 2022

An owner of a chain of hairdressing salons in Western Australia has been fined over $42,000 for underpaying two hairdressers and ordered to repay the employees more than $90,000 in total for unpaid wages under the state Hairdressers Award 1989, plus interest.

An investigation by industrial inspectors from the Department of Mines, Industry Regulation and Safety, found that owner Mr Zhu of Shining Quick Cutz failed to pay the two migrant workers the correct minimum wages, overtime, penalty rates, meal and tool allowances and annual leave on termination.

Mr Zhu also failed to keep records of the employees’ working hours.

 

Lessons for employers

This case and penalties serve as a warning to employers doing the wrong thing. Lorraine Field, Private Sector Labour Relations Executive Director, said the decision highlighted the risk employers faced for failing to pay employees correctly.

“Employers who underpay staff risk both hefty penalties and reputational damage to their business.” Ms Field said.

“Compliance with employment laws is not optional.”

The penalties for underpayments made under WA state employment laws have increased following the recent enactment of the Industrial Relations Legislation Amendment Act 2021. This factsheet has more information regarding the increased penalties.

How can employers ensure that employees receive their correct entitlements?

The first step in ensuring that employees are paid correctly is to ensure compliance with award entitlements, including correctly classifying employees for the work being performed and pay wages and allowances as applicable.

HABA, in partnership with our legal partners at Ai Group, produce wage advices for employees under the Hair and Beauty Industry Award 2010 and the WA state Hairdressers Award 1989.

These wage advices can be downloaded via the HABA website, or contact the HABA Advice Line on 02 9221 9911 and our advisers can assist you with determining the correct classification, award rates and other entitlements.

 

Further advice or assistance

For advice on this topic or any other workplace relations matter, call the HABA Advice Line on 02 9221 9911.