Employees have clawed back $1 billion in stolen wages and entitlements — but there could be more out there

Employees have clawed back $1 billion in stolen wages and entitlements — but there could be more out there
  • PublishedJune 5, 2024

A phone call from his university was the final straw for international student Ali Syed.

Ali had been working the graveyard shift serving late-night city revellers in a Sydney convenience store since he arrived in Australia in 2022.

For the first few months he received regular pay, which helped keep him afloat as he studied for his master’s degree in cybersecurity.

Soon, however, Ali’s boss began withholding his wages. 

Ali Syed walks down a busy street
Ali says he felt hopeless after his boss started underpaying him for the hours he was working.(ABC News: Billy Cooper)

His salary was often paid late, and rarely did it cover all the hours he had worked.

Now the university was threatening to expel him and report him to Home Affairs unless he paid his overdue fees.

“I was very helpless, it was stressful,” recalled Ali, who spoke to the ABC using a pseudonym due to an ongoing legal process.

“In Australia, I noticed that if employers know you’re on a student visa they will use you and throw you in the dirt.”

When he confronted his boss about the underpayment, he was fired.

All up he is owed more than $60,000 in lost wages and entitlements, says his Legal Aid NSW lawyer Giles Fryer, who notes it’s a “life-changing amount of money”.

Ali is one of a growing number seeking help from the organisation in the last year, with a 43 per cent surge in people saying they’ve been underpaid wages, entitlements or superannuation.

The Fair Work Ombudsman has also answered 330,000 enquiries relating to wage theft and has recovered $509 million in unpaid wages and entitlements in the past financial year.

More than a quarter of a million Australian workers have been back-paid.

But not everyone has been so lucky.

Underpaid workers left devastated

Miriam, a regional New South Wales resident aged in her late 60s, sought help from Legal Aid NSW after she was unexpectedly made redundant as a retail worker in a small business.

She is also using a pseudonym to protect her privacy.

Miriam said the turning point was when she asked her employer for a pay slip — something she had not received during her more than 15 years working for the company — as she needed it to prepare for getting a pension.

“I asked for a pay slip on the Thursday and the following Tuesday he terminated me,” she said.

“I just feel stupid because I didn’t ask for things [like pay slips and superannuation] because I believed he was looking after me.”

Legal Aid calculated she was underpaid at least $130,000 in the last six years, the time limit imposed for underpayment claims.

Despite the Federal Circuit and Family Court ordering a payment of more than $140,000 to Miriam, she didn’t see a dollar as her employer filed for bankruptcy.

“Yes I’m devastated,” she said.

“I was hoping to get my money and leave NSW.”

Underpayment ‘everywhere’ in Australia

Mr Fryer said this case highlights how widespread and entrenched underpayment is in Australia.

“Young and old, city and regional, it’s everywhere, unfortunately it’s part of Australia’s work culture,” he said.

He said clients are talking about rising household costs and increased interest rates.

“They are concerned that they’re being underpaid at work and they are coming forward perhaps more frequently than they otherwise would to seek advice about entitlements,” he said.

Close up shot of hands and paperwork.
Legal Aid says wage theft is widespread and an unfortunate part of Australia’s work culture.( ABC News: Maren Preuss )

In the last two financial years combined, the Fair Work Ombudsman recovered more than $1 billion in unpaid wages and entitlements.

Fair Work data show that since 2009, more than 40 per cent of 60,000 businesses audited were non-compliant in regard to wages.

New laws to criminalise wage theft and close loopholes undercutting pay and conditions for workers come into effect from January 2025.

Some of the nation’s biggest employers and institutions have come under fire for large scale underpayments including Qantas, BHP, NAB, CBA, Coles, Woolworths, Super Retail Group and the ABC.

A class action alleging NSW Health underpaid junior doctors has settled after the department agreed to a payout of nearly a quarter of a billion dollars.

The University of Queensland recently revealed it owed $8 million in unpaid wages to about 10,000 staff.

The claim brings wage theft claims in the tertiary sector in excess of $180 million, according to the National Tertiary Education Union.

Workers fight back: ‘Our time is money’

McDonald’s is facing a $250 million compensation claim over allegedly denying paid breaks to thousands of workers.

Woman wearing McDonald's uniform takes selfie inside fast food restaurant's staff room.
Mikayla says she’s owed more than $26,000 for years of overtime and untaken breaks.(Supplied)

Mikayla Martin is part of the 25,000-person class action against the global food giant — demanding compensation for hours worked that they say have gone unpaid.

She joined McDonald’s Seven Hills store in Western Sydney when she was 18, quickly rising through the store ranks becoming a shift manager within two years.

“It was like a cult,” the now-26-year-old said.

“You were just owned by them. It was like you sold your soul to McDonald’s.”

“[For young people] it’s one of our first jobs, and particularly to be selected to be in a role of responsibility like that — you’re incredibly flattered and excited, so you’re going to go and put yourself in situations that might not be ideal.”

Young woman in black top stands solemnly in green garden.
Looking back at her time with McDonald’s, Mikayla feels exploited.(Supplied)

Ms Martin said she was told by her area managers that she had to come in before her shift began and register her lunch break in the system, to remain compliant with Australian labour laws, but to continue working on the fast-food outlet’s floor.

“I was told on a few occasions that that would get me ready for being an actual manager, because you don’t get a break when you’re a real manager,” she said.

In total, Ms Martin said she is owed more than $26,000 for years of overtime and untaken breaks, an amount she said would have been “life-changing”.

“I could have done so many things, but I didn’t have that opportunity,” she said.

Ms Martin, who is now a bartender, quit McDonald’s in 2021.

“I used to lay in bed … until 2am, sick to my stomach with anxiety,” she said.

“I haven’t worked in a workplace that toxic since.”

She is also hoping the legal move will trigger other industries to consider workers’ rights.

“I don’t want other people to be going through that and being exploited,” she said.

“Our time is money.”

In a statement, McDonald’s Australia said it intends to defend the claims and takes its obligations under all applicable employment laws seriously.

“Our people do an incredible job running our restaurants and serving our customers, every day, and we are committed to ensuring they receive all correct workplace entitlements and pay,” the statement said.

A yellow M on a red square sign
Mikayla hopes the class action pushes more employers across different industries to properly pay their staff.(ABC News: Michael Clements)

As for Ali Syed, his friends in the Pakistani community rallied around him after he received the call from the university, and they have lent him the money to pay his university fees.

“They gave me instantly that money,” he said.

“Those guys helped me out a lot … and for that I am thankful.”

He’s now pursuing his underpayment through the courts.

“By the grace of God I’m now in a strong position and can go to court,” he said.

“A ray of hope in the dark night.”

SOURCE: ABCNEWS

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