In the recent federal budget the Government has committed to real time super in a bid to curb the billions of dollars lost in unpaid employee super.
When businesses underpay workers in any form it’s labelled as wage theft. It could be a deliberate deed, an unintended error, or a consequence of the complexity of our HR laws, but it’s all wage theft in the eyes of the public.
It’s rife in this country, but only the big ones make the news. Usually we’re talking mere millions like in the cases of David Jones and Wesfarmers but none were as big as Woolworths who have admitted to around $750 million in underpayments. Beyond the headliners there’s a stack of small employers getting caught – cases this year include 13 Perth security businesses, seven Optus Stadium cleaning companies and a local Hans Café outlet.
The theft often involves an underpayment of award rates, particularly penalty rates for overtime and weekends.
Another less acknowledged form of wage theft is unpaid or late paid employee superannuation. The ATO estimates that employees missed out on around $3.4 billion of their super entitlements in the 2019/20 year alone.
Employers currently provide for employee super each and every payday and immediately disclose the super on their employees’ pay slips. But that doesn’t mean it’s been paid because businesses are not required to remit the super until after the end of each quarter.
With limited scrutiny, it can be tempting for a struggling business to forego its super commitments to cope with pressing cashflow issues. By the time the ATO catches up with late payers they’re sometimes insolvent making it difficult to recover unpaid super (which can include voluntary employee contributions). Historically the ATO recovers only 14% of unpaid super from directors of insolvent companies.
Even if businesses always pay the super on-time, employees are foregoing earnings on that super for months at a time, and the compounding effect of this is significant. It’s not the business’ fault – it’s the law.
In this digital and automated age, it’s sensible policy that from July 2026 employers will be required to pay real time super – i.e. at exactly the same time as they pay employee wages. Superannuation clearly forms part of an employee’s remuneration package and they should not have to wait months to receive the benefit of it.
It will also provide a better mechanism for the ATO to crack down on rogue employers quickly and the budget has allocated some further resources to this.
The Government has recently accepted a Senate enquiry recommendation to criminalise wage theft and it’s likely that this will apply to all forms of remuneration including super.
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Author: Mark Douglas
Email: [email protected]
