The former operators of a Sydney hairdressing salon have incurred more than $291,000 in penalties, as well as having received backpayment orders, for having underpaid a worker through an unlawful cashback scheme.
The Federal Circuit and Family Court has imposed a $100,000 penalty against Yeon Beauty Salon Pty Ltd, which operated the Yeon Art Hair salon, and a $39,091.50 penalty against the company’s sole director and manager, Mi Yeon Ha, after having determined that the salon and Ha were guilty of underpaying the employee’s minimum entitlements and for requiring her to make unlawful cashback payments.
The breaches occurred between 2015 and 2019 when the worker, a South Korean national, was sponsored by the company on a subclass 457 skilled work visa to work as a hairdresser. Upon investigation, Fair Work Inspectors found that the worker had been underpaid more than $49,000 due to underpayment of her minimum wages, a tool allowance, overtime pay and penalty rates for weekend and public holiday work under the Hair and Beauty Industry Award 2010 and the Fair Work Act’s National Employment Standards.
In addition, the worker was told to cover leave entitlements and “amounts associated with her visa”, including training fees, accountants’ fees, tax and superannuation. In total she was unlawfully instructed to repay a total of $105,609 of her wages and entitlements to Ha.
The worker gave evidence that she at first did not ask questions about the cashback payments because she did not want to harm her working opportunities in Australia. And when she later asked Ha to provide her with payslips, Ha replied words to the effect of, “I am doing so much for you, as your working visa sponsor, you will get permanent residency, if you are asking me all these questions and being difficult, it’s not good”.
Yeon Beauty Salon was also found to have breached workplace laws by failing to make and keep records, on occasion, issuing the worker with false and misleading payslips, and regularly failing to issue payslips.
Judge Robert Cameron said he was not persuaded that Ha felt any remorse in relation to her treatment of the worker and found that there was a need to impose penalties to deter Ha and other employers from similar conduct in future.
“I accept that it is important that penalties be set at a level such that they are not an acceptable cost of doing business, and so tend to discourage repetition or emulation of the contraventions,” Judge Cameron said.
In addition to the penalties, the company and Ha have both been ordered to pay the worker a total $103,036.25 (plus interest), and the company an additional $49,577.17 compensation (plus interest) to rectify the underpayments and cashback payments.
This story was originally published on Inside Small Business.
