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FWO sends out warnings about payment and pay methods

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Working hard for the money

The FWO has stressed that workers (i.e. labour hire and employees) must be paid the correct wage in accordance with the Horticulture Award. It is likely that the FWO will be closely monitoring the horticulture industry (and other industries where visa holders are predominately employed) given the high incidences of exploitation that have recently been reported in the media.

As harvest season is fast approaching, the Fair Work Ombudsman (FWO) has reminded growers that they need to be familiar with their obligations under the Horticulture Award 2010 (Horticulture Award). The reminder has been issued in response to claims that labour hire contractors are approaching growers and offering workers at very low rates of pay.

The FWO has stressed that workers (i.e. labour hire and employees) must be paid the correct wage in accordance with the Horticulture Award. It is likely that the FWO will be closely monitoring the horticulture industry (and other industries where visa holders are predominately employed) given the high incidences of exploitation that have recently been reported in the media.

The attraction to “picking” is common amongst backpackers and short stay visa holders (who usually have no right to work in Australia) because they receive “cash in the hand” or free food and accommodation in exchange for work whilst enjoying their stay in Australia. The practice of paying “cash in hand” without keeping any records (or deducting any tax) or “paying” employees with food and accommodation is illegal under the Fair Work Act 2009 (Cth) (FW Act) and applicable immigration and taxation laws.

In 2014, the FWO conducted six “unannounced visits” to farms and found that 2 employers had underpaid 22 employees. The FWO also found 4 employers had record keeping and pay slip contraventions. Given this latest media release from the FWO, employers in the horticulture industry should make sure they are prepared for an unannounced visit by the FWO.

The arrangement of working “for food and/or accommodation” is not exclusive to the horticulture industry. In 2015, a large poultry processing employer was found to have underpaid its employees, forced them to work extremely long hours and required them to pay high rents for overcrowded and unsafe accommodation.

Employers have an obligation under the FW Act to pay an employee “in relation to the performance of work” in money whether it be by cash, cheque, money order or EFT. To clarify, employees who are on the books can be paid in “cash”; however, they must still be issued payslips and paid in accordance with the applicable modern award. Employers are strongly reminded that it is a breach of the FW Act to “pay” an employee wholly in food and/or accommodation or other creative means.

Employers should seek legal advice if they are uncertain of their obligations with respect to payments and/or deductions where employees are required to live on an employer’s premises or in employer provided accommodation.

 

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