Court action for alleged cashback payments
The Fair Work Ombudsman (the Ombudsman) has initiated legal action against the previous operators of a hairdressing salon in Sydney, for allegedly underpaying a South Korean employee through cashback payments. The Fair Work Inspectors began their investigation after the employee had requested for assistance.
The sole director and manager of Yeon Beauty Salon Pty Ltd trading as Yeon Art Hair (the Salon), was Mi Yeon Ha (Ms Ha). The South Korean worker was sponsored to work in the Salon on a 457 skilled work visa between 2015 and 2019.
It is alleged that the Salon and Ms Ha had breached the Fair Work Act 2009 (Cth) (the Act), requesting that the employee repay more than $100,000 of their wages and entitlements in cashback payments.
It is alleged that the Salon also underpaid the employee’s minimum wage rates, a tool allowance, leave entitlements, penalty rates, public holiday rates and overtime rates under the Hair and Beauty Industry Award 2010 and under the Act.
The Ombudsman has alleged that the cashback payments and collective underpayments have led to the employee being underpaid a total sum of $169,266.00.
It is further alleged that the Salon failed to create and maintain records, on occasion distributed the employee with false and misleading pay slips and regularly failing to issue any pay slip at all.
Sandra Parker, the Ombudsman, stated that matters involving the alleged underpayment of visa holders are treated very seriously, as they may be more susceptible in the workplace.
Sandra Parker stated “All workers have the same rights in Australia regardless of nationality or visa status…,”
The Ombudsman is seeking penalties imposed by the court against the Salon and Ms Ha, and court orders requiring them to pay the employee $169,266 in compensation and back-payments, with the addition of interest.
The Salon has received maximum penalties of up to $63,000 per contravention, and Ms Ha has received maximum penalties of approximately $12,000 per contravention.
We encourage you to contact our Workplace Relations Team on (07) 3872 2222 or at workplacerelations@amaq.com.au, if you have any further questions or queries about award compliance and workplace law.