A Fair Work crackdown into the hair and beauty industry has revealed most businesses are non-compliant, leading to more than $369,770 in backpay being distributed to hundreds of employees.
The campaign found many were not being given a wage increase which came into effect in July 2012.
Out of 858 randomly selected hair and beauty salons audited, 55% were found to have breached their obligations under workplace laws.
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Only 384 of the 858 businesses were compliant with their obligations, a fact the FWO labelled “disappointing”.
“We were also disappointed that some employers are still not aware of the need to pay their employees for compulsory in-house and external training, when it is not part of vocational training,” Fair Work Ombudsman Natalie James said in a statement.
The last audit of the industry was in 2009 and 62% of businesses were found to be compliant.
Queensland was found to have the highest compliance level of 58%, while Victoria and Canberra were the worst offenders, with rates of 25% and 21% respectively.
James says while the overall contravention rate was concerning, all the businesses involved opted to voluntarily rectify their mistakes by back-paying their staff.
The underpayments at the salons ranged from as small as $10, to $16,064 at a Darwin salon. Other businesses also had record-keeping and technical breaches.
The key reasons for the underpayments were found to be a failure of the employers to implement the July 2012 wage increase, not paying juniors and apprentices for compulsory training and failing to increase an apprentices wage on their birthday or the progression of the next year of their apprenticeship.
Hair and Beauty Industry Association general manager Sandra Campitelli told SmartCompany the education process is an “ongoing battle”.
“We’re in an industry which is very transient. We have worked harder than we ever have in terms of education programs and offering businesses information… Most of the problems are sorted out quickly and members also come to us and voluntarily ask for us to conduct an audit process.
“But there are a number of new businesses which come into the sector and don’t have any guidance. Sometimes it takes getting into trouble for them to realise they need to do something,” she says.
TressCox Lawyers partner Rachel Drew told SmartCompany the FWO frequently conducts audits of problem industries.
“In the hair and beauty industry there are always people coming and going and setting up their own practices.
“This high rate of casual labour and a high turnover of staff makes it harder for employers to keep up with correct rate of payments,” she says.