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Cleaning away underpayments

UnderpaymentsJuly 31, 2015

Cleaning away underpayments (Last Updated On: July 31, 2015)

Myer has thrown its cleaning contract with RCS Cleaning Services in the bin,  after Fair Work inspectors found that cleaners at several Myer sites were short changed $6,300 in less than a month.

Fair Work inspectors were investigating whether cleaning companies contracted by Myer were meeting their obligations under the Fair Work Act and the Cleaning Services Award 2010. Unfortunately, after interviewing two cleaners who worked for one of the subcontracting companies, they found that whilst one was classified as an employee, the other was incorrectly classed as an contractor.

The two cleaners were each paid $17 an hour, regardless of the hours and days they worked. The Fair Work Ombudsman determined that they both should have been classified as employees and been paid at least $22.51 an hour.

After meeting with subcontracting director, business manager and company accountant, Fair Work inspectors found that as well as underpaying its direct employees, the company had misclassified a number of staff as independent contractors.

Fair Work inspectors found that nine staff had been short-changed amounts ranging from $225 to $1009 for the pay period May 4 to May 31 this year. They were underpaid their minimum hourly rate, minimum four-hour engagement period, broken shift allowances, penalty rates for early and late shifts, overtime rates and penalties for weekend and public holiday work.

Myer has met with Senior Fair Work Ombudsman officials to discuss the importance of ensuring that companies in its supply chain are compliant with their lawful workplace obligations, particularly minimum wage rates.

As a result of the Fair Work investigation, one subcontractor has entered into an Enforceable Undertaking with the Fair Work Ombudsman to ensure behavioural change and future compliance with workplace laws.

It is important that employers understand the difference between an employee and a contractor. Contact Employsure today on 1300 651 415 to discuss your employee contracts, minimum wage and your workplace obligations.

Sourced via Fair Work Ombudsman Website

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