Unpaid wages cause stress to employees. Accepting employment comes with an expectation that as an employee, you will be paid. When entering into any form of work, whether as private sector employees, employees at-will, or contractors, they are entitled to national minimum wage standards.
However, circumstances arise where an employer fails to make proper payment of wages to an employee. Hence, employees should be informed about their rights when this occurs. This article discusses unpaid wages and steps an employee may take to address this.
An Employee's Right to Wages and Entitlements
Employees have certain payment and working conditions entitlements under the Fair Work Act. The Fair Work Act requires employers to pay employees accordingly:
- In line with the federal or minimum wage (or minimum pay rates)
- In a consistent and timely manner, such as weekly, bi-weekly, semi-monthly or monthly, or
- In defined paydays: for example, weekly on Wednesdays.
Generally, an employee's entitlements include, but are not limited to, the following:
- Overtime and allowances,
- Bonuses and commissions,
- Personal leave,
- Long service leaves,
- Superannuation, and
- Redundancy pay.
An employee's wages and entitlements depend on the contract of employment, national employment standards, an enterprise agreement, or other entitlements in legislation.
Normally, an employee comes into agreement with the employer as to the method of payment. Wages can be paid in cash, check or postal orders payable to the employee, or electronic transfers in an account nominated by the employee.
What About Training?
An employee may need to complete mandatory training to ensure they have the right skills and knowledge to perform their job. This can include online or formal training courses or team training.
If an employer mandates an employee to do training as part of their job, they have to be paid for those hours worked. Employers should also pay for time spent in team meetings or opening and closing the business, if they require the employee to be there.
For example, Ellie recently started as a sales assistant in a shop. Before her first shift, she had to complete an online course that showed her how to use the cash register and explained all the company policies. The training took her two hours.
When she finished the course, she worked three hours on the shop floor. Because the training was compulsory, Ellie's employer should pay for the two hours she spent doing the online training as well as for the three hours she worked on the shop floor.
Remedies for Unpaid Wages
If you are facing a situation of unpaid wages, consider taking the following steps:
Talk to Your Employer
It is prudent to talk to your employer first. Contact your employer and explain your concerns. Your employer could miss or reduce a wage payment because of various reasons, which include the possibility that overpayments were made, or bankruptcy. Or perhaps your employer or the payroll company made a mistake.
Thus, before jumping to conclusions, it is always best to make a reasonable enquiry to your employer regarding your unpaid wages. If the employer fails to give a satisfactory explanation or offer to address the missing wages, make a demand for the unpaid wages in writing. An email with the date of the pay period from which the wages are missing and the amount you remain entitled to should suffice.
Contact the Fair Work Ombudsman
If your employer fails to address the matter of unpaid wages, consider taking the issue to the next level. File a claim with Fair Work Ombudsman (FWO):
- Go to the Fair Work Ombudsman website and supply information about your situation.
- Respond to the investigator who will contact you to discuss your claim.
- Prepare to attend a voluntary resolution session with your employer present. This will allow for both you and your employer to participate in a mediation process that might address the unfortunate circumstances.
The FWO offers assistance by:
- Organising mediation between you and your employer,
- Providing investigation and prosecution processes,
- Helping you start a court case, and
- Taking further action against your employer such as filing a wage theft complaint.
Start a Court Case
If you and your employer fail to reach an agreement through mediation, further action can be taken by the FWO or you can file a claim with the court. Most cases start in the Federal Circuit and Family Court of Australia (FCFCOA).However, in New South Wales it is possible to start your claim in a more local venue such as the Magistrate's Court or the Local Court.
Note for employees on Queenslad: If you believe that your employer's conduct could be a crime, you may wish to make a criminal complaint against your employer. You may also review the relevant Queensland Police Service (QPS) information about wage theft, and if appropriate, complete the wage theft report form available on the QPS page. If the matter is not resolved in conciliation, your claim will progress to a court hearing in the Queensland Industrial Magistrates Court.
Make a Claim Under the GEERS or FEG
If your employer cannot pay your wages because they have gone out of business, you may still be able to recover some of what you are owed. If your employer is in the process of declaring bankruptcy, you can still make a claim for your unpaid wages.
In these circumstances, you can make a claim under the General Employee Entitlements and Redundancy Scheme (GEERS) or the Fair Entitlements Guarantee (FEG). However, remember that in these cases, you might not be able to claim the entirety of your missing wages.
Lawful Arrangements for Unpaid Wages
Know that there are situations of legitimate unpaid work as opposed to unpaid work where the employee should actually be paid. Legitimate unpaid work occurs in different forms such as internships, students completing vocational placements, or volunteer work in a non-profit organisation.
People enter these types of work only to gain experience in a job or industry. If such arrangements are applicable, not paying the person for doing some work can be lawful.
The Importance of Seeking Legal Advice
It is very unfortunate when you do not get wages for the work you have done. But, sadly, it does happen. Going to your employer and attempting to solve the problem directly with them is the best way to begin handling a situation of unpaid wages. This results in fast resolutions of what might have been a simple error or misunderstanding.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.