This month the National Tertiary Education Union (NTEU) released its latest Wage Theft Report, revealing the extent of underpayment of wages in the tertiary education sector. The report is part of an ongoing review by the NTEU, which will publish a final report in January 2024.

Casual workers

The report indicates that casually employed workers are more vulnerable to wage theft than those who have secure employment, and notes that two thirds of all staff at Australian universities are employed insecurely through casual or fixed-term arrangements, even though most of the work they perform is needed on an ongoing basis.

The report states that casual workers can face inequitable arrangements and fear of reprisal, including the loss of work if they raise complaints over underpayment or ask for compensation for hours worked for free. Several circumstances were identified in which wage theft occurs, such as:

  • being paid for fewer hours than the work requires;
  • paying piece rates for marking or lecture preparation instead of the actual time worked;
  • sham contracting to undercut Award and Agreement entitlements;
  • teaching misclassification; and
  • unpaid overtime.

Misclassification of workers

The report also identified teaching misclassification as among the most common forms of wage theft in universities, including casuals but also full-time and part-time employees. This is a common issue more broadly, where an employer applies the incorrect category or level of role under an Award to the position held by an employee, typically resulting in wage payments at a rate below which the employee is entitled to for the role.

Unpaid overtime

Unpaid overtime was also found to be common across universities, often arising from employers setting unrealistic time frames for marking student assessments and other work to be completed.

Consequences in the sector

The report reveals a staggering $159m in underpayments across Australia’s higher education sector, affecting more than 97,000 staff and 30 employers. Underpayments were detected by the NTEU going back as far as 2009. The NTEU calls for better governance within the tertiary education sector and comprehensive reform of university payroll management systems to end wage theft.

Implications for employers more broadly

Some of the circumstances identified above as reasons for wage theft occurring resonates in sectors beyond tertiary education. The report highlights the importance for all employers of collecting accurate data in respect of work performed by casuals, not just the time rostered to work, but also the actual times worked, including additional unscheduled work time, to ensure payroll systems can accurately compensate casual employees for their work.

In addition, the report emphasizes the need for employers to ensure that appropriate payroll policies and procedures are in place to ensure roles are correctly captured in accordance with the relevant Award and that reasonable expectations for completion of work are set by employers. In the case of roles, an employer may seek legal advice for the proper application of employee categories or levels in an Award to workers’ actual roles.

Part One of the new 'Closing Loopholes' Bill also passed the Senate on 7 December 2023. The changes brought by the Bill include:

  • criminalisation of intentional wage theft (including underpayments of superannuation), and
  • enforcement of 'same job same pay' rules, particularly addressing labour hire arrangements.

Wage theft results in serious consequences for employers, including latent and long-term liabilities to employees and former employees, fines and penalties, brand damage and now potential criminal investigation. If you are an employer with concerns about employee underpayments and would like to have a confidential conversation about how Grant Thornton may be able to assist, please contact us.  

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