The Money Mustache Community
Other => Off Topic => Topic started by: Fresh Bread on January 16, 2019, 12:39:25 AM
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There's a guy that runs a local business in my area that is underpaying his staff. I'm aware of the situation because I interviewed someone for my business (I'm not a competitor though). I'm wondering if I should report it to some suitable organisation or whether I should let it be. What would you do?
The background: Here in Australia, we have pretty strong protections for casual workers on minimum wages. You would get close to $25/hr which would include some money into your retirement fund, insurance cover for accidents at work (for things like rehabilitation) but no leave or sick benefit.
Some employers circumvent the high min wage by employing staff as contractors and then paying them whatever they like. To qualify as a contractor, the staff member must be using their own equipment and the like. In this business they are definitely provided with everything and are working as employees not contractors.
So, on the side of leaving it alone:
The staff are all adults and have gone into this knowing the pay of ~$15 per hour. It's not too different to someone in the gig economy using a platform like Airtasker to take on a job like removals or cleaning or gardening for less than what would be considered a living wage around here. The staff are mainly youngish people from overseas on (probably) temp visas that are probably happy to take the work they can get. Maybe the business owner gives them other benefits in lieu of $ like food or fuel.
Also maybe I'm just grumpy that I may be paying many thousands more in wages per yr.
But on the other hand:
I think it's unfair that someone can profit by exploiting others against the laws that have been put in place to protect them. Regardless of the low pay, the staff have no health insurance (although health care is sort of free here, there are limitations for visitors) or liability insurance to protect the clients. I imagine should something bad happen they would just pack up and get a flight home but still.
Also, although I try to follow all the rules and regs and I'm 99% sure I'm doing it all correctly, there are a lot to follow and there could be times I get it wrong. Let he who is without sin cast the first stone and all that. Maybe this guy genuinely thinks he's above board?
Lastly, I imagine this sort of thing is pretty rampant here in small businesses given how hard it is to break even while paying such high wages in the service type industries. I know of at least one other business doing this and one that got dobbed in, not by me! What if every business was dobbed in - would our economy suffer - only half joking!
What would you do, phone it in or leave it be? I could talk to the guy but he's quite an aggressive personality from what I've heard so I'm not sure I want to.
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If it's under minimum wage, which looks to be about A$19 per hour I'd phone it in. I wouldn't bring it up directly with the business owner because that doesn't sound like it would go down well.
The government brought those worker protections / minimum wage for exactly this sort of reason.
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If it's under minimum wage, which looks to be about A$19 per hour I'd phone it in. I wouldn't bring it up directly with the business owner because that doesn't sound like it would go down well.
The government brought those worker protections / minimum wage for exactly this sort of reason.
Thanks for your input!
It's something like $18.x and then you add 25% if they are casual and not getting paid leave. So quite a bit really.
ETA: plus add 9% superannuation.
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I would be reporting them, it seems like the owner is exploiting these workers who may not know what they are entitled to if they are from overseas
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I would report them to the Fairwork ombudsman, you can make an anonymous report on their website. I work with a lot of young people who get ripped off by employers & I report them if I have enough info. As well as ripping off those workers he's probably also not paying his taxes.
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I don't see how this is your business. Maybe they won't have any job at a higher wage and ratting them out will hurt them by making them unemployed.
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I would report them to the Fairwork ombudsman, you can make an anonymous report on their website. I work with a lot of young people who get ripped off by employers & I report them if I have enough info. As well as ripping off those workers he's probably also not paying his taxes.
Yes. Report to Fair Work - the employees may not know their rights, or be afraid to report at the risk of losing visa sponsorship.
Or a tip off to A Current Affair might be in order too :)
I don't see how this is your business. Maybe they won't have any job at a higher wage and ratting them out will hurt them by making them unemployed.
So you condone illegal conduct by an employer? Good to know.
There is a set of rules for a reason. If one business breaks those rules by undercutting the competition, it puts all those other law-abiding businesses at a higher risk of failure.
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What is the unemployment rate there? Will the workers have a hard time finding new jobs if this company has to close or has to let the workers go?
Yes, this company is breaking the law. But you said you don't know the details of the arangement.
The simple answer is yes, call it in. But, since you're asking us here, maybe you aren't sure that's what you want to do. Why don't you try to get a bit more info about the business & the situation? Try chatting with the owner to see what kind of guy he is. If he's a jerk it will make your desision easier.
If 10 families lose the only income they have and their children go hungry because you "did the right thing" that would be a sad situation for the families. If there are plenty of better paying jobs for these workers they'd probably leave the underpaying jobs, right? Are these foreign workers worth the legal minimum wage? Maybe most other businesses won't pay them that either? I don't know the situation there. I'm just asking since you said that the minimum wage is considered high.
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Do you think this law is beneficial to all workers and job seekers, or not?
If yes, report it.
If not, don't report it.
Why do I suggest this criteria? Well, how high would the unemployment rate and the minimum wage have to be for you to consider the law to no longer be in the best interest of workers? What if there was a 20% unemployment rate with a $40/hr min wage? I'm guessing you wouldn't think twice about turning a blind eye. That would be a bad law that doesn't benefit most workers.
So the question comes down to your best judgment of whether or not your actions would be beneficial to workers in your area. Forget about the law, you're not the one breaking it and you're under no obligation to report it.
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This is a variation of the trolley problem, isn't it? Do you risk the harm of those workers losing jobs (not necessarily a given, but lets say worst case), or more widespread, less acute harm from unenforced labor regulations (law abiding businesses less profitable, proliferation of shady businesses, workers denied benefits req'd by law, etc)?
I think in your shoes, I would ask, if there are 100 guys nationwide facing your same dilemma now, and another 100 in 6mo or so, and so forth, how would you as a citizen want them to respond? That's what you should do.
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I think it is best to talk to the workers first. Their welfare is the main focus of concern.
I would just tell them they are being underpaid and see how they respond. If they are still happy with the situation, then I would just let it go and still have a clean conscience.
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I'd only call it in once you have definitely verified and have all the facts. You have that, then for sure. The fact the employees might not have a job or the employer might have to close the doors ,,, if there not playing by the same rules then I wouldnt sweat it for a minute. But again, I'd do a lot more investigative work first.
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Why haven't the workers reported this themselves? Why haven't they switched to jobs that pay a higher wage?
Likely because they can't find work at the minimum.
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Thanks everyone for helping me think this through!
I think the key point that's been made is that the workers have the option to find better paid work but haven't. But also that it's possible that they are unaware of that fact or unable to get those jobs (poor written English possibly).
So my best next step will be to quietly inform them of minimum wage and protections. I'm thinking that a subtle way of doing this would be to let them know of a job going in the same industry "which only pays minimum wage of about $24 but of course you're probably on now, plus your super of course. Yeah super, it would show on your payslip? Oh don't you get a payslip..? you're a contractor? oh wow, I think that's actually illegal. Ok see ya!"
Maybe they'll say "oh no, I like this job, thanks" and then I'll just leave it be.
It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
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I wouldn't hesitate in contacting Fair Work. This impacts both the employees AND the competition.
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
Probably not. It's unlikely they are but I've heard of people that have done it. Seems silly though as you burn your bridges.
Most of the young workers here are on a one year working holiday visa that can be extended to two. Some will then get a student visa so they can stay and from there you can somehow apply for residency. If you have rich parents I think you go straight for the student visa ;)
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
Probably not. It's unlikely they are but I've heard of people that have done it. Seems silly though as you burn your bridges.
Most of the young workers here are on a one year working holiday visa that can be extended to two. Some will then get a student visa so they can stay and from there you can somehow apply for residency. If you have rich parents I think you go straight for the student visa ;)
So you will turn away when you see people breaking the law? You are the one butting in in the first place in your desire to get the authorities involved in their wage situation.
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
Probably not. It's unlikely they are but I've heard of people that have done it. Seems silly though as you burn your bridges.
Most of the young workers here are on a one year working holiday visa that can be extended to two. Some will then get a student visa so they can stay and from there you can somehow apply for residency. If you have rich parents I think you go straight for the student visa ;)
So you will turn away when you see people breaking the law? You are the one butting in in the first place in your desire to get the authorities involved in their wage situation.
I'd have to think more but I'm more concerned with the ethics and worker safety than laws. Plus I have no idea about their visa situation so it's v hypothetical right now.
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Telling the workers might help the individuals currently being taken advantage of (if they leave), but the employer will continue to take advantage of new replacements.
I think it’s interesting to see the very different responses you’ve received from people who have their location listed as Australia on their profiles vs those that don’t. As you can probably tell, we in the US are a lot less concerned about rich people breaking the law to make more money than we are about disadvantaged groups breaking the law to survive.
When I was a kid working my first job, our employer did some illegal stuff to make a bigger profit. One was not paying us for the time we worked from clock in to clock out on our timecards and instead only paying from clock in to official store closing time, which was always at least half an hour earlier, and subsequently caused us to be effectively paid less than minimum wage for the hours we worked. We eventually realized and brought it up to the owner, so we eventually were able to get paid for the full day worked going forward. Had an adult reported it to the authorities, we would have gotten back pay for the money he owed us from the previous years.
And maybe the scrutiny would have helped end this next problem earlier: this company was a dry cleaners and the owner also exposed us to hazardous chemicals (said it was just water) and instructed us to dump the daily waste on the ground outside. I am happy that a concerned citizen noticed that something didn’t seem right and notified the proper authorities to inspect. That irresponsible owner caused a toxic waste plume of TCE in the groundwater that affected the health of our whole town. But it would have been stopped a year earlier if a different concerned citizen had reported it instead of bringing it up to the owner. By going to the owner first, the owner had us dump it at night out back instead of up front. We trusted the owner when he told us this change was just to avoid negative perception (TCE is a colorless liquid, so being dumb kids we believed the adult who said it was just water). So it took another year before another concerned citizen realized what was going on and notified the authorities. All the while the owner pocketed the money he should have been paying to properly dispose of the hazardous waste. All the while profiting at the expense of the whole town’s health.
So now if something doesn’t seem right in a skewed power dynamic situation, I’d err on the side of bringing in authorities to inspect.
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
Probably not. It's unlikely they are but I've heard of people that have done it. Seems silly though as you burn your bridges.
Most of the young workers here are on a one year working holiday visa that can be extended to two. Some will then get a student visa so they can stay and from there you can somehow apply for residency. If you have rich parents I think you go straight for the student visa ;)
So you will turn away when you see people breaking the law? You are the one butting in in the first place in your desire to get the authorities involved in their wage situation.
I'd have to think more but I'm more concerned with the ethics and worker safety than laws. Plus I have no idea about their visa situation so it's v hypothetical right now.
These folks admit to you that they are overstayers. Aren't they damaging society by suppressing wages and squeezing the housing stock and using up resources? Don't you have an ethical obligation to get them deported? (Only saying this for the sake of discussion!)
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It did occur to me that some of these workers could be on expired visas and/or are probably not putting in tax returns, which would be their trade off for no worker protections. Paying no tax increases their earnings quite a bit as a non-resident (no tax free portion) but then adds another layer to the ethical dilemma!
If you found out they were on expired visas would you call immigration to have them deported?
Probably not. It's unlikely they are but I've heard of people that have done it. Seems silly though as you burn your bridges.
Most of the young workers here are on a one year working holiday visa that can be extended to two. Some will then get a student visa so they can stay and from there you can somehow apply for residency. If you have rich parents I think you go straight for the student visa ;)
So you will turn away when you see people breaking the law? You are the one butting in in the first place in your desire to get the authorities involved in their wage situation.
I'd have to think more but I'm more concerned with the ethics and worker safety than laws. Plus I have no idea about their visa situation so it's v hypothetical right now.
These folks admit to you that they are overstayers. Aren't they damaging society by suppressing wages and squeezing the housing stock and using up resources? Don't you have an ethical obligation to get them deported? (Only saying this for the sake of discussion!)
I have to say, that’s a pretty pessimistic view of whatever country this hypothetical is occurring in. This presumes that increasing the workforce of said country only has negative effects for that country, in terms of using up resources and squeezing housing stock. What about all the benefits of having an additional worker like increasing GDP, increasing rental prices for landlords, increased local purchases that add to the economy. And if there was better enforcement of requiring employers to pay minimum wage to all employees, even with questionable immigration status, then it wouldn’t have any effect to suppress wages. So really the only part of your argument that is valid is the part about suppressing wages, which is exactly why a company paying less than minimum wage ought to be flagged to investigators!
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Telling the workers might help the individuals currently being taken advantage of (if they leave), but the employer will continue to take advantage of new replacements.
I think it’s interesting to see the very different responses you’ve received from people who have their location listed as Australia on their profiles vs those that don’t. As you can probably tell, we in the US are a lot less concerned about rich people breaking the law to make more money than we are about disadvantaged groups breaking the law to survive.
When I was a kid working my first job, our employer did some illegal stuff to make a bigger profit. One was not paying us for the time we worked from clock in to clock out on our timecards and instead only paying from clock in to official store closing time, which was always at least half an hour earlier, and subsequently caused us to be effectively paid less than minimum wage for the hours we worked. We eventually realized and brought it up to the owner, so we eventually were able to get paid for the full day worked going forward. Had an adult reported it to the authorities, we would have gotten back pay for the money he owed us from the previous years.
And maybe the scrutiny would have helped end this next problem earlier: this company was a dry cleaners and the owner also exposed us to hazardous chemicals (said it was just water) and instructed us to dump the daily waste on the ground outside. I am happy that a concerned citizen noticed that something didn’t seem right and notified the proper authorities to inspect. That irresponsible owner caused a toxic waste plume of TCE in the groundwater that affected the health of our whole town. But it would have been stopped a year earlier if a different concerned citizen had reported it instead of bringing it up to the owner. By going to the owner first, the owner had us dump it at night out back instead of up front. We trusted the owner when he told us this change was just to avoid negative perception (TCE is a colorless liquid, so being dumb kids we believed the adult who said it was just water). So it took another year before another concerned citizen realized what was going on and notified the authorities. All the while the owner pocketed the money he should have been paying to properly dispose of the hazardous waste. All the while profiting at the expense of the whole town’s health.
So now if something doesn’t seem right in a skewed power dynamic situation, I’d err on the side of bringing in authorities to inspect.
Wow, thanks for sharing that story, @BECABECA! How did the contamination get resolved?
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If you have enough information I would report it. There might be some risk the workers might lose their jobs, but ethically you are acting in the greater good. If they lose their jobs they might get one with better pay. I've come across enough anecdotes to know that there is a minority rorting the system.
I recently had reason to get some painting done and got a good quote from the boss. The actual painters were Chinese who neither spoke nor understood English. They were diligent, worked really hard and did a good job in trying conditions - it was 35C or so all week. I did worry about this"arrangement", but had no way of confirming they were being correctly paid other than asking the boss. So I didn't take it further.
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I think it’s interesting to see the very different responses you’ve received from people who have their location listed as Australia on their profiles vs those that don’t. As you can probably tell, we in the US are a lot less concerned about rich people breaking the law to make more money than we are about disadvantaged groups breaking the law to survive.
I think the other reason there might be a big difference in responses from the USA VS Australia is the difference in minimum wages.
Here in the US it's $7.25. In some states it's $10, and there is a movement to get it to $15. That movement gets a lot of attention on the left and nothing but ridicule on the right.
Converting the currencies, Australia's minimum wage of $25 AUD is about $17 USD, and these underpaid workers at $15 AUD are making about $10.75 USD.
In other words, in the US they would be low paid, but still paid well above the national minimum wage and above the minimum wage in states with higher minimums. People in the US are probably less surprised by a company paying $15AUD ($10.75 USD) for low-skilled workers because here low-skilled workers make about that much.
Is it possible that Australia's minimum wage is so high that it has priced workers out of the market and those workers are happy to have a job paying less?
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If someone is paying less than the statutory minimum wage, then they are breaking the law. But before calling it in, consider the possible unintended consequences.
The workers are presumably accepting the low pay, and voluntarily (I mean, unless they are in chains or something). Giving them the benefit of being able to rationally make their own decisions, we must assume that working at the current rate is in their own interest, according to whatever values they may have.
If the workers haven't decided to speak up to the authorities themselves, again, we must assume that they find this arrangement acceptable. And the result matters more to them than it does to you.
There is the possibility that if the employer is fined or forced to raise wages, they may elect instead not to hire anybody. In that case, you would be responsible for making things worse for everyone. I myself wouldn't meddle in it.
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There is an inherent power imbalance between employer and very low wage earners. Its not as simple as walking away and finding another job, or being happy with an illegal employment situation.
Is it possible that Australia's minimum wage is so high that it has priced workers out of the market and those workers are happy to have a job paying less?
I doubt it! Although the employers ripping off their workers would certainly say so! The cost of food, clothes and petrol and many other consumer goods is about 1.5x that of US after taking into account the exchange rate ( a subject of much discussion amongst the Aussies here in the early days). I'm not sure about rent - it would depend. So the Aussie minimum wage likely doesn't buy any more than the American.
If people are desperate they will take what they can get. Many won't speak out for fear of repercussions of varying sorts. Ripping off the vulnerable offends the core Aussie value of A Fair Go.
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I doubt it! Although the employers ripping off their workers would certainly say so! The cost of food, clothes and petrol and many other consumer goods is about 1.5x that of US after taking into account the exchange rate ( a subject of much discussion amongst the Aussies here in the early days). I'm not sure about rent - it would depend. So the Aussie minimum wage likely doesn't buy any more than the American.
Thanks for the information. I didn't know that. In that case it makes sense that the Australian minimum wage is higher than in the US.
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Simply put, when you are paying the most unskilled workers in society close to $20/hour (even more on weekends), you're going to end up with low-skill industries underpaying their employees.
The alternative is under-employed low-skilled workers flocking to the gig economy.
Lots of people aren't worth $20 an hour. Probably 1/4 of the population is too stupid/useless to pay them that much.
Personally I would not report it. The market has a fantastic way of sorting itself out. Mind your own business and work on your own value.