Anything but child’s play: $85,000 penalty for childcare operator underpaying staff

A Melbourne childcare operator, Vivien Mahomet, has been penalised $85,000 for repeatedly underpaying employees over a two year period.

The FWO said the two workers were vulnerable because they had been unemployed for a long period of time and were afraid of challenging their employer.

The employees were underpaid a total of $14,341 for minimum ordinary hours, overtime, public holiday penalty rates, and annual leave and broken shift allowances.

The most recent underpayments occurred even though Ms Mahomet had received $6,000 in Commonwealth Wage Subsidies for employing the two workers. To make matters worse, Ms Mahomet had also been penalised $19,980 in 2014 for underpaying five other childcare workers more than $16,000.

Judge Philip Burchardt stated that Ms Mahomet required a ‘sharp lesson’ to ensure she appreciated her legal obligations in future. His Honour noted this was especially true, given Ms Mahomet continues to operate three childcare centres.

Judge Burchardt found that Ms Mahomet had shown no remorse, not apologising to the workers and had taken ‘a long time’ to rectify the underpayments. Mahomet paid the workers their lawful entitlements only after the FWO commenced legal proceedings.

In addition to the $85,000 penalty, Judge Burchardt ordered an injunction, restraining Ms Mahomet from underpaying childcare workers in future. This means Ms Mahomet risks contempt of court proceedings and possible jail time if she breaches the Award or NES again.

This case emphasises the need to know and understand your minimum wage and entitlement obligations under the Fair Work Act 2009 and applicable Awards. It is also a reminder that the maximum penalties have increased (Fair Work Amendment (Protecting Vulnerable Workers) Act 2017).

Contact our  Employment, Safety and Migration team as we can help if you are unsure of your minimum wage and entitlement obligations.

This article was written by George Haros, Principal Lawyer – Employment, Safety and Migration.