Crown Melbourne and Crown Perth are facing significant payroll underpayment issues. It serves as a reminder for all employers to prioritise payroll compliance to avoid similar situations.

Crown Resorts, the parent company of Crown Melbourne and Crown Perth, self-reported underpayments to the Fair Work Ombudsman (FWO) in March 2020. This report was in response to a letter from Fair Work Ombudsman Sandra Parker urging top ASX-listed companies to prioritise payroll compliance.

So how did this happen?

1. Underpayment:

The underpayments were a result of various factors, including incorrect identification of employees as award-free, failure to meet obligations under applicable awards, low annualised salaries not meeting award requirements, and inadequate record-keeping. Consequently, entitlements such as penalty rates, minimum hourly rates, overtime, and paid leave rates were underpaid.

2. Employee Back-Payments:

Crown has fully remediated over $1.2 million, including superannuation, interest, and gratuity payments, to 192 current and former employees. However, eight former employees are yet to receive their back-payments, which must be made within 180 days as per the Enforceable Undertaking (EU) signed with the FWO.

3. Contrition Payment and Compliance Measures:

In addition to the back-payments, Crown Melbourne and Crown Perth must make a combined $350,000 contrition payment to the Commonwealth Consolidated Revenue Fund. Under the EU, Crown has committed to implementing stringent measures to ensure correct payment practices, including commissioning independent annual audits to monitor compliance with workplace laws.

4. Communication and Transparency:

As part of the EU, Crown is required to notify all underpaid employees about the EU's commencement. They must also publish notices in newspapers, on their website, Facebook page, and in workplaces regarding their contraventions.

We emphasise the importance of prioritising payroll compliance. Failure to meet lawful entitlements can lead to significant financial and reputational consequences.