Underpayments: Getting what you’re owed

The scourge of underpayments isn’t just a financial issue; it's personal. When you're working long hours or overtime, it can take a toll mentally and physically.

Many Australians work on public holidays, missing important family gatherings, and regularly put in overtime to get the job done. While they understand this is part of their role, the expectation is they will be fairly compensated.

As thousands of current and former Coles and Woolworths staff members have found, this isn’t necessarily the case. They are the latest to be caught up in an underpayment scandal, with the Federal Court ruling that employers can’t “balance out” overpayments and underpayments over time. Rather, they must meet the minimum legal requirement in every pay period.

So what can you do about underpayments? If it’s a one-off mistake, this is generally easily rectified by bringing it to the attention of payroll. But what if it’s systemic? Let’s take a closer look at what you can do about it.

 

 

Common reasons for underpayment

No matter your job title, you’re entitled to the pay and conditions your award or agreement guarantees, including the minimum wage (based on relevant award or enterprise agreement); overtime (working beyond contracted or rostered hours); penalty rates (weekends, public holidays, overnight work); and allowances (such as uniforms and tools, as applicable to your role).

While Coles and Woolworths are in the spotlight for underpayment, they are far from the only offenders. Other well-known employers that have admitted to underpayments – for everything from hourly rates to superannuation payments – or been investigated include the ABC, Qantas, Grill’d, Bunnings and Subway.

The Federal Court also awarded more than $144 million in compensation in November 2024 to Aboriginal people for wages that were either withheld or underpaid between 1936 and 1972.

There are many reasons for underpayments, including:

• • Averaged or annualised salaries: Employers may agree to a salary that’s meant to cover base pay plus extra work. But if the set-off isn’t calculated correctly, that is at every pay period, employees are likely to be missing out on proper payment for working overtime or public holidays, as well as other entitlements.
  • Payroll errors or poor record keeping: When companies don't accurately track hours, breaks, clock-ins, or rosters, they may underpay without realising. The Federal Court found that Coles and Woolworths failed to meet their record-keeping obligations.
  • No system for overtime: Some employers don’t have formal overtime systems for salaried staff. That means extra work isn’t accounted for properly.
  • Pay rate changes: After an employee is promoted, or there is an award update, employers sometimes fail to adjust salary arrangements properly, leaving staff on outdated pay conditions.

 

 

What you can do about underpayments

Take a closer look at your employment contract and payslips. Use the Fair Work Ombudsman’s pay and conditions tool to see if your employer is meeting their obligations. If something doesn‘t add up, the following steps will help you seek restitution:

• • Collect evidence: Go back as far as your records allow. Check payslips, rosters, clock-in records, emails, and timesheets. Write down when you worked, including extra hours, weekends and public holidays. If your records are incomplete, try to reconstruct them with calendar entries and diary notes.
  • Raise the issue internally: Speak with the human resources or payroll department. Show them the evidence. Humans make errors, and systems aren’t perfect. This could be resolved without the need for further action. Be polite but firm when outlining the situation. Remember, you are not asking for a favour but for what you are legally owed.
  • Make a complaint: If you are getting pushback internally, take the case further. The Fair Work Ombudsman, the government body that took Coles and Woolworths to Federal Court, handles underpayment claims. Suggest to the employer that you contact them together in the first instance as this may bring clarity for both parties. If the employer isn’t amenable, call or write to the ombudsman outlining the issue.
  • Seek legal advice: Lawyers specialising in workplace law can help assess your claim and negotiate on your behalf.
  • Join a class action: Class actions amplify worker voices and reduce the burden of legal costs. If there’s an existing case before the courts, such as the Coles and Woolworth class action, check if you meet the criteria. If so, you may already be part of the class action but register so that you are kept updated.

 

 

Standing up for everyone’s rights

While Woolworths and Coles are in the spotlight now, their case reflects a much broader issue: underpayment is all too common. When workers unite to challenge these systems – through class actions, the Fair Work Ombudsman, or advocacy such as unions holding burger giant Grill’d to account – they can bring about real change.

Experts say the Federal Court ruling in the Coles and Woolworths case will have far-reaching consequences, with one expert estimating an increase in underpayment bills of between three and five fold.

While class actions are often a last resort, they can lead to systemic reform. In the case of employee entitlements, this includes more accurate record-keeping, fairer pay practices, and better compliance with industrial rules.

Whether it’s workers standing up against underpayment or consumers challenging unfair business practices, speaking up can make a real difference. Handle My Complaint has long advocated for consumer rights, and if a business has let you down, make a complaint with us and we’ll help you handle it.

It is not just about recovering what you’re owed — it’s about helping create a fairer standard for everyone.