Two café operators in Melbourne are now subject to Court-Enforceable Undertaking (EU) after they were found by Fair Work to have underpaid 26 of their employees close to $25,000. The EUs mean that the operators are now committed to improving their compliance with respect to statutory obligations under Fair Work.

Under the EUs the two businesses will also make a combined contrition payment of $8,000 to the Commonwealth Government’s Consolidated Revenue Fund.

Fair Work inspectors found the businesses did away with penalty rates in favour of flat rates over a period of four months last year. This resulted in underpayments for ordinary hours, overtime, weekend and public holiday penalty rates under the Restaurant Industry Award 2010.

Ensuring that base rate, allowances penalties and/or loadings and other entitlements are paid correctly, it is important for small businesses to consult with a HR or payroll specialist in order to avoid a breech of Fair Work requirements.

If you discover an underpayment, immediate remedy can be applied by:

  • Working out the period of underpayment
  • Working how much the employee was actually paid
  • Working out how much the employee should have been paid
  • Calculating back payment by multiplying the difference in actual and correct wages by the period of underpayment
  • Process the back pay
  • Keep updated with future wage increases

READ: Melbourne cafes back-pay 26 workers

The information provided in this blog is a guide on the subject matter. Specialist advice should always be obtained for your circumstances.