You are entitled to be paid the greater of the wage you agreed to receive for your work, or the minimum payable for such work pursuant to any relevant award or other industrial instrument. In addition, your employer must make at least the minimum contribution to your superannuation fund required by the superannuation guarantee.
If you are unsure what wage you are entitled to, review any letter of engagement or letter of offer you received, or your employment contract if you entered one. Otherwise, review the relevant Award or Enterprise Agreement (if applicable).
The superannuation guarantee is set by the Commonwealth parliament and compliance with it monitored by the Australian Taxation Office. The current contribution amount is 10% (as from 1 July 2021).
If you earn less than $450 gross in a calendar month, your employer is generally not required to make any superannuation contribution on your behalf. The minimum income threshold is due to be removed from 1 July 2022.
Underpayment of wages
1. Discuss with your employer
If you believe you have not been paid your full entitlement to wages, you should first bring it to the attention of your employer.
Australia’s Awards are not easy to understand. It is not uncommon for an employer to make a mistake when paying wages. Once notified of such a mistake, most employers will correct the mistake, by paying the shortfall.
However, it may be that your employer does not agree with you (and your advisers). It could be, for example, your employer interprets a clause in the Award differently to you. A discussion about this difference can sometimes result in agreement.
2. Lodge a complaint with the Fair Work Ombudsman
If you cannot reach agreement with your employer, you have the option of lodging a complaint with the Fair Work Ombudsman. Usually, the Fair Work Ombudsman will only investigate a complaint that you have not been paid in accordance with the relevant Award or Enterprise Agreement – i.e. My Award hourly rate is $23.50 and only being paid $23.
The Ombudsman is unlikely to investigate a claim of breach of contract – i.e. that my employer agreed to pay me $100 per hour but is only paying me $35 per hour.
3. If claim up to $20,000
The Federal Circuit Court has a small claims jurisdiction for claims of underpayment of wages that are for $20,000 or less.
You can represent yourself. You do not need a lawyer. The rules of evidence do not apply.
The benefits of making a small claims application include that it’s less formal, faster and less expensive.
4. If claim more than $20,000
The Federal Circuit Court has a general jurisdiction for claims of underpayment of wages that are for more than $20,000.
The rules of evidence do apply. Unless you are very familiar with the rules of evidence and court procedure, you should engage a lawyer. Legal representation will come at cost as litigation is labour intensive, and solicitors and barristers (lawyers) expensive – but can you afford to not be represented?
Your solicitor will know what to do, and will manage the process for you, and therefore at least removing the stress of you having to ‘find your own way’.
Usually, it is a ‘no cost’ jurisdiction. That is, each party pays their own legal costs. If a party behaves unreasonably, the party can be burdened with a costs order.
Underpayment of the superannuation guarantee
1. Discuss with your employer
If you believe you have not been paid your full entitlement to the superannuation guarantee, you should first bring it to the attention of your employer.
2. Lodge a complaint with the Australian Taxation Office
If your employer does not correct the underpayment, you can lodge a complaint with the Australian Taxation Office (ATO). The ATO is charged with monitoring compliance with the superannuation guarantee and taking enforcement action when necessary.
If you elect to commence legal proceedings to pursue a claim for underpayment of wages, you must do so within six years of the underpayment. If you have any questions, please do not hesitate to contact us.