One in five workers aged under 25 have been paid less than the legal minimum for their age, according to new analysis.
Analysis of the Australian Bureau of Statistics (ABS) employee data by the Australian Council of Trade Union (ACTU) from August 2024 shows 19.9% of young people were getting underpaid.
This data predates new laws criminalising wage theft, which came into effect earlier this year.
So, what’s going on?
Underpayment
There are several reasons why workers could be underpaid.
The Fair Work Ombudsman has previously attributed some underpayments to poor record-keeping at businesses and organisations.
Under Australian law, workers usually need to raise a complaint in order to recover lost wages.
Some business groups and organisations found to have been underpaying staff in the past have blamed it on “complex” awards.
Wage theft
While there are some cases of accidental underpayment, wage theft is the deliberate underpayment of staff.
From 1 January, wage theft became a criminal offence for bosses, meaning they risk 10 years in jail or substantial fines.
Before the law came into effect, the Fair Work Ombudsman (the national workplace watchdog) could take up a civil claim against employers, but not criminal action.
New analysis
Today, new analysis suggests 20% of workers under 25 were being underpaid as at August 2024.
In that month, the ABS conducted a ‘Characteristics of Employment’ survey to gather data on employee earnings, trade union membership, and working arrangements (casual, part-time, etc.).
The ACTU analysed the ABS microdata, which gives a detailed breakdown of incomes and working hours, of workers aged 15-25.
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According to the ACTU, an 18-year-old casual employee working 20 hours a week could be losing $1,560 annually in underpayments.
A 2023 Grattan Institute report found migrant workers are twice as likely to be underpaid than Australian residents.
TDA is not suggesting any company or organisation has deliberately underpaid their staff. The ACTU analysis provides a broad overview of wages data.
Limitations
The ACTU analysis does not account for individual circumstances.
That means the data, which is based on survey responses to the ABS, isn’t cross-referenced against an employer’s payroll.
The data also excludes permanently employed workers 25 and under, as the ABS data doesn’t specify whether someone is an apprentice or trainee, who are usually paid a lower rate while earning a qualification.
ACTU
ACTU Secretary Sally McManus called wage theft a “hidden epidemic”. Despite the new wage theft laws, McManus said the new analysis shows “there’s more to be done.”
The union body said young workers struggle to recover underpayments due to the time and expense of court proceedings, fear of boss backlash, and limited powers of the Fair Work Ombudsman.
“One in five Australians aged under 25 go to work, do their job, and then get ripped off by their boss,” McManus said.
Business groups
TDA approached the Business Council of Australia (BCA) for comment, but did not receive a response before publication.
In a separate response to a proposed wage theft tribunal over the weekend, BCA’s chief executive Bran Black called for a “simplification of awards”.
“No one’s disputing that employees should be paid properly,” Mr Black said.
But he said the workplace relations system is “so complex” that even the federal employment department had “underpaid its employees”.
