Superannuation theft costs workers billions every year, and Industry Super Australia is calling on state governments to push for change.
New research from Industry Super Australia (ISA) found super underpayments total $1.4 billion annually in Victoria alone.
Almost one in every three workers in the state is not receiving their full super payments, and the average size of these underpayments is estimated at $1750 a year, the research found.
At a national level, employers are estimated to have withheld $5.95 billion in super that should have been paid to workers in the 2016-17 financial year.
That figure was up $340 million on the 2013-14 financial year.
But ISA deputy chief executive Matt Linden said the people responsible for holding employers accountable – the Australian Taxation Office (ATO – were not doing enough to stop the practice.
“Unpaid super blasts a hole in workers’ savings, making a huge difference to their quality of life in retirement,” he said.
“With such little enforcement action taken against those responsible for the unpaid super scandal it is time for Victoria’s federal and state politicians to act.”
The change that could save workers billions
Mr Linden attributed part of this problem to an “outdated” law allowing employers to pay their workers’ super on a quarterly basis.
As a result, many employers choose not to pay the guaranteed super contribution in line with workers’ pay cycles and some missed payments simply go unnoticed.
ISA also cautioned this rule allowed “some dodgy bosses” to get away with deliberate underpayment.
But changing those rules so super contributions are made at the same time an employee is paid could drastically reduce the size of employers’ underpayments, Mr Linden said.
Now ISA is calling on the Victorian state government to push for change at both a state and federal level.
“The only way to put this $1.4 billion super rip-off to an end is for the Federal Government to make super payable on payday,” Mr Linden said.
Across the state almost a third of Victorian workers are having their super stolen, no area is immune
“The Victorian Government can add its voice to fix this problem once and for all.”
Mr Linden’s comments come after the Victorian government pledged to crack down on wage theft and even considered jail time for employers who don’t pay their workers properly.
“A fair day’s wages for a fair day’s work is a simple concept and yet many hard-working Victorians are still under-paid and exploited,” Attorney-General Jill Hennessy said.
“The Andrews Labor Government is introducing new wage theft offences to hold employers accountable, and fast-tracking court processes to help workers recover their entitlements.”
The New Daily is owned by Industry Super Holdings