How Wage Theft is Crippling the Foodservice Industry

One of the most controversial topics to hit 2019 was the presence of wage theft within the foodservice industry. Protests and media scrutiny brought to light a problem that has plagued the industry for a while now. The penny dropped in 2017 when celebrity MasterChef judge George Calombaris was slammed by the federal government for underpaying staff $2.6 million. Unfortunately, this story may only be the tip of the iceberg, with more cases of wage theft being raised.

It’s a positive sign for the hospitality industry that this problem is finally being recognised and offenders are being held accountable. However, if you’re a foodservice professional, it’s important to be aware of what wage theft looks like, what it does to the industry and the actions you can take to protect yourself.


What is wage theft?

Wage theft comes in many shapes and sizes, so it’s often hard to get your head around. The term itself was originally coined by unions, but has since been employed by mainstream media. To quote the Sydney Morning Herald, it’s “the practice of paying workers less than they are entitled to under Australia’s workplace relations system.” This term covers underpayment of wages, incorrect lodging of hours or withholding leave entitlements (just to name a few).


Why is it prevalent in foodservice?

It’s tough to pin down exactly why hospitality professionals cop it so bad. But here’s a few potential reasons:

  1. Penalty rates (and their constant fluctuation) can be confusing to say the least, especially for travellers new to the country. Also, if the owner doesn’t fully understand the process, there’s potential for mistakes to be made.
  2. The workforce is made up in big part by young people. Many foodservice roles require you to start at the very bottom and most applicants have little experience. Young up-and-comers are possible targets for misinformation.
  3. There’s an unfortunate lack of resources for hospo workers. Only recently have unions begun to form and make some noise. It’s a really good start, but more help would go a long way towards combatting wage theft.
  4. With positions in high demand from backpackers and students there’s often stiff competition for front and back of house roles. Job seekers will regularly accept less than they deserve out of desperation for work.


How this affects the industry

There are a few ways to look at this, with a wealth of implications for the industry. But here’s just some of the negative effects of wage theft:

  1. Not only does it hurt entry level workers, but it severely hinders the prospects of the long-serving members of the industry. When wage theft occurs, it gives an unfair advantage to the perpetrators in terms of business revenue. The flip side to this is that honest employers will then struggle to compete in areas such as venue design, social media marketing etc.
  2. Lower wages mean less taxes. If the government was receiving more money from this sector, they could reinvest some of that to help with industry issues (such as regulating wage theft or mental illness initiatives for hospitality professionals).
  3. There’s a common perception in hospitality that it’s hard to find decent workers. This isn’t directly linked to wage theft, but if there were desirable salaries up for grabs somewhere down the line, more trained workers may stick around. There’s a bunch of enthusiastic chefs starting their careers but there comes a time where the fight financially can send them down a different career path.


How to protect yourself

There’s no one way about it, but if you’ve made it this far through the article, you’re already on the right path. Arguably, the best practice is to keep yourself properly informed, which may result in some very dry late-night reading, but if it means building confidence around what you’re owed it’s worth it. Hospo Unions are hard to come by, but online groups such as Hospo Voice are a positive start. They’re constantly on the front foot with cases of wage theft as well as other foodservice related issues.

If you suspect that you’re being paid unlawfully, Fair Work Australia has some helpful notes and a number to call for advice and guidance.