Woolworths has been fined $1.2 million for not paying more than $1 million in leave entitlements. Photo: AAP
Australia’s largest supermarket chain Woolworths has not repaid more than $200 million to workers it underpaid, as fresh data shows wage theft costs the nation up to $1.35 billion annually.
Woolworths revealed in its latest annual report on Wednesday that it still owed $65 million to salaried workers, more than three years after it began uncovering payroll errors.
A further $187 million still has to be repaid to hourly-paid staff after Woolworths’ internal review identified a wider wage theft scandal in its supply chain jobs, with $99 million repaid to date.
Despite all that, Woolworths posted a $1.7 billion cash profit in 2022-23, an increase of 13.7 per cent.
It comes as the supermarket giant faces a series of prosecutions over worker underpayments at both a federal and state level, including criminal allegations by Victoria’s wage inspectorate.
But if figures published this week by the McKell Institute are any guide, Woolworths is far from the only Australian business failing to pay its workers properly.
The institute estimates that wage theft is now costing Australian workers between $847 million and $1.37 billion a year, with thousands of businesses ripping off workers in a practice that undermines rule-abiding firms too.
Report author Rebecca Thistleton said that estimate is conservative, based on limited data.
Each year, the amount of money estimated to be unpaid to workers rises,” she said.
“This is an added strain on workers [who] are already facing rising cost-of-living pressures.”
Businesses large and small have been caught up in wage theft scandals in recent years, with the Fair Work Ombudsman (FWO) returning $532 million in unpaid wages and entitlements to more than 384,000 workers in 2021-22 alone.
Such eye-watering figures have raised the temperature around a push to criminalise wage theft at a federal level, something that the Morrison government backflipped on while in power.
The Albanese government took the policy to the election and is now attempting to pass such reforms through Parliament, though they’re facing opposition to their wider workplace agenda.
Ms Thistleton said that there appears to be bipartisan support for tougher penalties for wage theft, and a consensus that the system must be simplified to help ensure business compliance.
“While it is encouraging to see broad support for cracking down on wage theft within the Parliament, good intentions and ongoing rhetoric will not make the difference,” she said.
That state-level criminalisation may not be enough to represent a serious reprisal to businesses that get it wrong was evident on Wednesday when Woolworths told investors its criminal prosecution in Victoria wasn’t expected to be “material” to its bottom line.
Interestingly, McKell’s latest wage theft research has estimated how much workers are being underpaid by the electorate in an attempt to make the political stakes clearer to politicians.
The figures (contained in the table below) show Melbourne – a seat held by Greens leader Adam Bandt – had the highest estimated wage theft losses at $17 million for 28,000 workers.
Brisbane, held by Greens MP Stephen Bates, had an estimated $11.9 million in losses across about 19,200 workers, while North Sydney (teal MP Kylea Tink’s seat) had $10 million in losses for about 16,500 people.
The government has indicated that nationally consistent laws to criminalise wage theft will be introduced in the coming months,” Ms Thistleton said.
“A national approach is critical for real change and Australian workers need the legislation to pass.
“That’s why we have quantified wage theft by federal electorate, to show Australia’s federal legislators and decision makers how wage theft impacts the people who vote for them.”