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Can you pay your workers in pizza and soft drink?

Two Melbourne companies were recently fined a total of just under $280,000 by the Federal Circuit Court for underpaying their employees. The director of the companies was personally fined a further $55,000.

Their crime? There were many, but the most interesting of them is that they had partly paid 111 employees, one of whom was only 13, in discounted pizza and soft drink rather than money. The underpayments amounted to $258,000.

While it’s not uncommon for employers to offer discounts to their employees, it’s important to realise that discounts do not count as wages and cannot be relied upon to make up minimum wages or award wages. The Fair Work Act requires that wages be paid in full and in money.

There are some exceptions to this rule, the most common of which is where the employee has authorised the deduction in writing and the deduction is principally for the employee’s benefit. It’s possible that this exception might have applied if the companies had obtained express authority in writing from the adult employees or the parents of the minor employees (purchasing discounted food and drink using money you haven’t received yet is clearly a benefit to the employees) but they either didn’t know or didn’t care about the issue.

FWO provides legal services in all areas of employment law. If you need advice about employee entitlements, record-keeping or dealing with the Fair Work Ombudsman, give our employment lawyer Jay Clowes a call on (02) 6650 7016.

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