7-Eleven Penalties Reach $1.8M as Cashback Scheme Uncovered

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7-Eleven Penalties Reach $1.8M as Cashback Scheme Uncovered

$355,664 in penalties has been secured by the Fair Work Ombudsman against a Melbourne company operating a 7-Eleven franchise. This brings the total penalties involving 7-Eleven franchisees to $1.8 million.  It is events such as this that highlight the significance of fulfilling your obligations as an employer – by outsourcing your payroll to a managed payroll provider such as PaysOnline you can rest assured you won’t be caught in a compliance storm.

Xia Jing Qi Pty Ltd, which operated the 7-Eleven outlet on William Street in Melbourne until March 2017 has been penalised $154,225 for requiring three international students to repay part of their wages in an unlawful cashback scheme. The company was also charged an extra $145,800 for underpaying a migrant worker at an Ajisen Ramen franchise in the Melbourne Central shopping centre.  

The former manager was charged a total sum of $9,590 for her involvement in the 7-Eleven convenience store breaches and the company’s director was penalised $26,049 for her involvement in the restaurant breaches.  

After the 2015 7-Eleven underpayments become uncovered, the company and Ms Lin attempted to hide the underpayment of three employees by requiring them to pay back thousands of dollars in wages. 

The three employees were told by Ms Lin in late 2015 that they would be paid through the payroll system but then were also specified a weekly sum that they had to pay back via a safe drop box in the 7-Eleven store or directly into Ms Lin’s bank account.  

After paying back the portion of their wage, the employees were left with hourly rates ranging from $8.53 to $26.52 – this lead to various underpayments of their ordinary hourly rates, casual loading, and weekend and public holiday penalty rate entitlements.  

The company was found to have also breached record-keeping laws by providing false records to Fair Work inspectors during their investigation of the 7-Eleven convenience store. 

The company Xia Jing Qi Pty Ltd, which also operated an Ajisen Ramen franchise in the Melbourne CBD, underpaid a Chinese worker, here on a 462 working holiday visa, by $9,616, after being paid $11.50 per hour between May and October 2016, and then amounts equating to just $3.98 per hour in her final week of work. 

Acting Fair Work Ombudsman Kristen Hannah said that employers who exploit migrant workers will be discovered and met with serious legal consequences. 

“The Fair Work Ombudsman will not tolerate any employers requiring any workers to pay back any of their wages. This cashback scheme was particularly deplorable as it undercut migrant workers, who can be vulnerable due to language and cultural barriers, or are reluctant to speak up,” Ms Hannah said. 

“All workers in Australia have the same rights at work, regardless of citizenship. We will continue to take enforcement action when businesses undercut migrant workers. 

“We have an agreement with the Department of Home Affairs where visa holders can contact us for help without fear of their visa being cancelled.” 

According to the Fair Work Ombudsman, it is unlawful for employers to keep employment records that they know are false or misleading – to find out what information you are required to keep, you can find more over on the Fair Work website. 

Outsourcing your company’s payroll to a managed payroll provider such as PaysOnline means you can rest assured that you won’t be caught up in compliance issues such as these. Contact PaysOnline managed payroll today for a solution to streamline your company’s payroll.

Source: My Business

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