How millions of Australian workers are being robbed by their bosses
Bosses fail to pay pensions, a growing crisis costing workers billions of dollars.
Annie Wang was only 19 years old when her employer, she says, failed to pay her super salary.
He hasn’t paid $8,000 of her pension dues and she’s still waiting to get her $3,000 of the money owed back.
She only realized that her surplus salary was missing as she checked if hers was underpaid.
“I found out that the minimum wage for my age at the time was around $19 – I was [being] I paid about $15.”
“But I was a college student, and I desperately needed a job.”
The underpayment continued for years, until Ms. Wang, now 22, decided to fight back.
Ms. Wang took legal action and recently reached a confidential settlement.
When your salary is low and your skills are low, complaining about your boss is not easy.
But, says Wang, workers have to stop accepting exploitation.
“You may feel like you have nowhere to go for help,” she says. “But the more you are willing to talk about it and raise awareness, the more you will be able to find people willing to help you.”
Lost $5 billion
Australia’s $3 trillion pension system is supposed to provide a comfortable retirement to millions of Australians.
It depends on the employers doing the right thing. But many do not.
Industry data for Greater Australia reveals that 2.9 million Australian employees lost $5 billion in employer savings contributions in 2018-2019.
This means that unpaid super affects more than a quarter of employees, costing each affected worker an average of $1,700 per year.
Like Ms. Wang, it is often young workers – and those who are underpaid and who work in construction, transportation, crafts, hospitality and accommodation – who are paid less than their salary.
Smaller employers are often responsible.
Even when employees succeed through the legal system, it may be years before they receive their money, if at all.
The effect of those supercompounds lost by the time they retire.
The unpaid Ms. Wang was expected to grow $3,000 to $15,500 by the time of her retirement.
The amputee missed disability insurance due to non-payment of pension
And it’s not just young people who get hurt by the unpaid super.
When employers don’t pay into the fund, disability insurance can forfeit.
That’s a lesson Greg Hislop, 50, an amputee learned too late.
Hislop has been chef at a bar since 2018.
He was already in a quarrel with his boss over being paid a pittance, but soon after, things got worse.
In February, he developed a life-threatening bacterial infection known as necrotizing fasciitis.
This led to his leg being amputated below the knee to save his life.
As Mr. Hislop was classified as an occasional employee, he had no sick pay or annual leave.
Mr. Hislop attempted to file a claim for total and permanent disability (TPD) through his pension fund.
He was told that the insurance cover had been discontinued because his employer was not paying contributions to his account.
Aside from earning as low as $20,000 in pension, he lost nearly $60,000 in TPD cover.
“That’s roughly a year’s wages for some people,” Hislop says, noting that he and his wife, Elizabeth, barely lived off their part-time hospitality income.
“I lost my salary, I lost my job,” continues Mr. Hislop.
“We were looking to buy a house. We had a deposit, but we had to go through half of that just to survive.
“I thought, with the TPD and the money I owed… I would have been able to cover myself up and get back on my feet.
“Unfortunately, we took this from us, because God knows the reason.”
His unpaid super amount could have risen by $20,000 to $36,400 by the time he reached retirement age.
His daughter Chloe, 22, also worked at the same bar, and also owes $6,500 in pension.
“I made the mistake of trusting my employer because my pension was on my pay slip,” Hislop says.
“But you really need to check [with your super fund]. And if you are not paid, you have to ask [employer] the question [why?].
“You must be confident in yourself, not be afraid.”
Unpaid Super Hislop will accumulate to approximately $34,000 by the time of her retirement.
Fear prevents migrant workers from speaking out
Schinder Kaur says fear is the factor that prevents most migrant workers from speaking out about their unpaid super pensions.
Ms. Kaur previously worked on a temporary 457 visa as a chef, and says her employer underpaid her in addition to her pension.
She complained to the Fair Work Ombudsman about the lost wages and got the money back.
However, Ms Kaur says, the Australian Taxation Office told her it could not recover $16,000 from her unpaid pension because the employer-run company was no longer registered.
Therefore, she is considering taking legal action against her employer personally.
She says he provided her with data showing that the money had been transferred to the super account. However, when I checked her box, she was told that no money had been deposited.
Ms Kaur says the financial and emotional toll her family has taken has been great because it happened last year when COVID-19 closed.
“My baby was really small. He was like, ‘I think he’s only five to six months’,” explains Ms. Kaur.
“We don’t know anyone here. Nobody is here to help us… We don’t have enough money in our accounts.”
Ms. Kaur is 39 years old. Her unpaid pension amount of $16,000 could reach nearly $44,000 when she retires.
Urges workers to check their pension through their pension fund.
“I didn’t check. Because I blindly believe, and the employer believed. I checked with him, and he said he paid … the employers are taking advantage.”
Workers win in court but still waiting for super
Margaret Joyce is 59 years old and on the verge of retirement.
She worries that she will have to rely on her old age pension to survive.
“It was so stressful because I’m only a few years away from retirement,” she says.
Mrs. Joyce was working in a child care center in Lithgow.
It didn’t pay her nearly $6,000 in retirement.
Mrs. Joyce was one of several employees who chased their Superman through the United Trade Union.
The union has taken the case to the Federal Circuit Court of Australia.
In June, the court announced that her employer, the ECEC Department, had violated the Fair Work Act by not paying the pension and providing misleading returns to workers.
It issued orders that the company must pay joint workers more than $82,000 (including interest).
Then, in September, the court ordered the ECEC administration to pay $60,000 in fines.
However, Ms. Joyce is still waiting for her money.
ABC News has contacted all employers for comment but they have not responded.
Calls for jail time for employers who pay workers too little
Industry Super Australia CEO Bernie Dean wants an overhaul of the system.
Dean says this should start with pension funds being paid to workers coinciding with the day they are paid, so people can keep track of their pensions more easily.
Dean also wants to see tougher enforcement of penalties for employers who “steal” workers.
“There are sanctions available, but we’ve seen a real reluctance by the government and the tax office to show any force,” he says.
“This is a methodological problem.”
Australian Taxation Office Deputy Pensions Commissioner Emma Rosenzweig more conservatively estimates the unpaid pension amount at $2.5 billion.
Over the past year, Rosenzweig says, the Office of Employment Services has hit employers with fines of $240 million for failing to pay their workers’ retirement pension.
A previous amnesty offered to employers to recover from obligations resulted in more than $858 million being identified as owed since March 2020.
So far, $796 million of that amount has been paid, and there are $62.3 million under agreed repayment plans.
However, the ATO’s compliance actions over the past year have not seen even a single employer jailed.
“We investigate every unpaid super claim we are told,” Rosenzweig says.
“We encourage people to apply to us as soon as they think they haven’t received their retirement contributions.”
Rosenzweig says the ATO is trying to recover unpaid workers in insolvency, but if the company legally no longer exists, “the ATO is restricted from taking any further action.”
The Federal Minister of Savings, Senator Jane Hume, has also indicated that managers can be prosecuted in person through the courts.
“The ATO has the ability to go after the directors personally rather than the deregistered company.”
However, Shadow Employment Minister Stephen Jones says more needs to be done to hunt down employers who break the law.
“Over a 10-year period, we’re talking about $30 to $50 billion in numbers lost to workers’ retirement savings accounts,” Jones says.
“The tax office has to do a lot more than that.
“We also need to change the law to ensure that a pension refund is treated like a refund of any other wages.”
Ms. Wang wants to see employers who are deliberately and consistently paying workers less face jail time.
“It’s not just the super tax that people are missing out on – it’s the tax that would have been paid on top of that super tax that could have made a comeback in the Australian economy,” says Wang.