Sushi blitz: Fair Work Ombudsman recovers $746,000 in unpaid wages in targeted audit

Hero Sushi

The Fair Work Ombudsman (FWO) has asked consumers to consider the real price of cheap food after recovering $746,203 in unpaid wages for almost 400 workers in recent blitz of sushi restaurants.

The FWO has audited 45 sushi businesses in NSW, Queensland and the ACT, finding widespread non-compliance with workplace laws which has resulted in legal action against six businesses.

It found of all the audits conducted, 39 businesses committed workplace law breaches, which equates to a non-compliance rate of almost 90%.

Some of the workers were Korean nationals in Australia on working holiday visas, paid a flat rate that led to the underpayment of various loadings and leave entitlements.

The blitz has been described by workplace lawyers as a sign the FWO is narrowing the focus of its widespread underpayment campaign, with an eye on specific categories within the fast-food sector.

Ombudsman Sandra Parker said the compliance activity followed “increased requests” for assistance from vulnerable workers in sushi outlets.

“While the Fair Work Ombudsman never excuses employers who underpay their workers, we know that labour represents a significant cost in the food industry,” Parker said in a statement on Tuesday.

“Although everybody loves cheap sushi, perhaps we should ask ourselves — is what I’m paying enough to cover workers’ minimum wages and entitlements?”

Of the audited businesses, 37 were found to have underpaid staff, while 29 had breached record keeping and payslip laws.

Nine infringement notices were issued, with total fines of $17,850, alongside 15 formal cautions and six compliance notices.

In two of the six cases, the FWO has taken to court following the blitz, the Court has ordered penalties of $136,250 in relation to the underpayment of young Korean workers and the use of false records.

Three other cases, some of which involve young migrant workers, remain before the Court.

FWO blitz a sign of evolving strategy

Athena Koelmeyer, managing director at Workplace Law, says the sushi-specific blitz indicates the FWO’s approach to cracking down on underpayment in the fast-food sector is evolving.

“It is indicative of the approach the FWO is going to take where they detect, through their fairly rigorous data collection and analysis … a spike in relation to a particular industry,” she tells SmartCompany.

Employment lawyer Peter Vitale says the sushi audits are a sign the FWO is narrowing its focus, particularly on businesses in fast food and hospitality.

“[It’s] an unusually narrow focus, one can sort of read between the lines and imagine there was a pattern they observed and they decided to act on it,” he tells SmartCompany.

Flat rate approach not good enough

The FWO appears particularly focused on vulnerable migrant workers, and in this case, found employers had underpaid them by utilising a flat rate, which didn’t adequately consider loadings.

Koelmeyer says any employer that thinks paying a flat rate is still acceptable is dead wrong.

“The flat rate has gone the way of the dinosaurs,” she says.

“Any employer that thinks paying a flat rate for work, regardless of the time of work or day of the week, is going to pass muster is going to be sadly mistaken.”

Both Vitale and Koelmeyer stress just because workers are on visas, doesn’t mean they aren’t entitled to the same rights as Australian workers.

“If employees have a visa that allows them to work in Australia then they’re entitled to the same working benefits under the law as an Australian citizen,” Vitale explains.

Keeping records

Proper record keeping has emerged as a focus for the FWO in recent months, amid a spate of cases where businesses have either been found to have intentionally not kept adequate records or have failed to do so accidentally.

“We were particularly disappointed with the high level of record-keeping breaches discovered in the activity and will conduct follow-up checks at non-compliant sushi outlets. New laws mean employers face significantly higher penalties for serious breaches and we have no tolerance for employers that give inspectors false records,” Parker said on Tuesday.

Koelmeyer says complacency was driving some SMEs to think just providing a payslip to employees was adequate, but this is not the case.

“You need a roster or some other time and attendance record to know when hours were worked, to see what the penalties and loadings at that time were,” she explains.

“The message to get across is that a payslip alone is not enough to meet your record keeping obligations.”

NOW READ: FWO more likely to litigate against small businesses: Report

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