A new study from worldwide payroll HR and payroll provider ADP found that the average Australian worker works nearly an extra day each week without pay. Based on the annual average income, this amounts to about $12,600 per year.
The poll of over 2,000 Australian workers also indicated that unpaid overtime is on the rise compared to the pre-COVID-19 era. Workers are donating an average of 7.3 unpaid hours each week, up from 5.8 before the outbreak.
The rising number of unpaid overtime hours suggests that hundreds of firms across Australia may be violating amendments to the Fair Work Act adopted last year to protect workers.
“We are concerned that overtime hours done in Australia remain unreported and thus unpaid,” said Kylie Baullo, Vice President, Client Service Asia Pacific at ADP.
“There is a greater impact as workers move in and out of lockdowns due to their state’s ever-changing health situation.”
The Fair Work Annualised Wage legislation, introduced in March 2020, gives companies instructions to help them capture hours worked. The guidelines require employers to record employee work hours electronically and reconcile them against the Award and paid remuneration per pay cycle.
“We are increasingly finding this legislation has passed many by. There’s both a lack of awareness around the legislation, or around what it means to put into practice.
“Implementing the legislation is a challenge for small and large employers alike. For small businesses, the challenges lie around HR systems, capabilities or capacity.
“For larger organisations, it’s the complexity of working across such a large workforce and multiple awards,” said Baullo.
Depending on the state in which an employer is located, the repercussions of underpaying employees might range from a financial penalty to a criminal conviction. Last month, the state of Victoria enacted new wage theft rules (July 2021).
It is now a criminal offence in Victoria for an employer to intentionally underpay employees or dishonestly withhold employee entitlements.
“We expect other states to follow,” Baullo added.
“Never before have employers had to think about the hours being worked by people on annualised salaries. This Fair Work change has introduced that requirement, and COVID-19 has made it even more complex.
“A year on, we know that businesses are still struggling but recognise the need to implement these changes,” said Baullo.
“Our clients see that fairly compensating employees is no longer just the morally right thing to do, but the law.”
Key findings on unpaid overtime in ADP’s People at Work 2021: A Global Workforce View include:
- Each week, more than two-thirds (70%) of workers work unpaid overtime.
- Workers are giving an average of 7.3 unpaid hours per week, up from 5.8 before the outbreak.
- A quarter of the Australian workforce works more than 11 hours of unpaid overtime per week, a 10% rise over pre-pandemic levels.
- The proportion of Australian workers working more than 20 hours per week for free has also increased to 7%, up from 5% the previous year. The majority of workers who worked more than 20 hours of unpaid overtime each week were classified as essential workers.
- Employees who worked from home or in a “hybrid” office and home arrangement were more likely to work extra hours without pay than those who remained on-site during the lockdown and restrictions.
- According to the findings of a survey of more than 32,000 workers from 17 countries, Australians performed marginally better than the global average for unpaid overtime of 9.2 hours per week.
Zero work-life balance
When COVID-19 struck and forced office staff to work from home, former senior manager and mother-of-two Robyn Simpson focused on the positives.
“When we were first told we had to work from home, I thought it was great! I wasn’t going to be sad to say goodbye to my hour-long commute each way to my office in Sippy Downs (QLD), and I was excited at the prospect of more time with my children,” Ms Simpson said.
However, for Robyn, who lives on the Sunshine Coast with her husband Greg, six-year-old son, and eight-year-old daughter, the reality of working from home was far from what she had planned.
Robyn eventually left her job at a major corporation six months into the global pandemic. She had been exhausted after putting in a lot of unpaid overtime.
She has recently opted to leave the corporate world and pursue her own business, Choose the ‘Tude, where she can choose her hours.
Working from home during COVID-19 provided extra spare time in many people’s schedules. Time previously spent driving or taking public transportation to work could now be employed for other purposes. For Robyn, this meant an extra two hours per day – or so she believed.
“I ended up replacing the time I was at the wheel with time in front of a screen. If anything, I started working even earlier during COVID-19.
“It wasn’t uncommon for me to be online as early as 5 am. The two hours I supposedly saved from my daily commute instead went into doing even more work than before,” she said.
Robyn reached her breaking point when she was offered a new role on an exciting project without any extra resources or relief from her pre-existing duties.
“It was a huge compliment to be invited onto this new project, but I had to take a good look at my personal priorities and remember who I was really doing the work for – our family.”
Robyn now runs her own business, helping parents with young children to develop emotional and social regulation skills.
The report finds that COVID-19 has had a significant impact on many firms and workers worldwide.
“COVID-19 has taken a heavy toll on many businesses and workers around the world,but while the survey findings reveal the extent of the impact, they also offer glimmers of hope for the future,” according to the report.
“At a time of extraordinary economic, professional and personal disruption, workers and employers alike have largely stepped up to the mark, putting in extra effort and providing extra support.”
“While employers grapple with the economic and commercial headwinds, issues around worker confidence and job security, workplace conditions, pay and performance, mobility and gender and family concerns will continue to significantly impact the world of work and the people within it.
“Even once the pandemic has played out, the ripple effect is likely to continue to be felt for many months and years to come,” the report said.