Recently published research can reveal that up to 70 percent of Australian workers are working unpaid overtime. This comes as Australia experiences a surge in unpaid work as a result of hybrid working arrangements brought about by the covid-19 pandemic.

The research illustrates that Australians are on average working 7.3 unpaid hours per week. This is an increase from the 5.8-hour average reported before the pandemic took hold, while as many as a quarter of the Australian workforce are working more than 11 unpaid hours a week.

The research was conducted by conducted by HR and payroll provider ADP and consisted of surveying nearly 2,000 Australian workers. It was discovered that the cost of unpaid overtime accumulated to approximately $12,600 a years’ worth of unpaid labour.

The research also showed that Australians who were working from home, or alternatively employed in some form of “hybrid” arrangement were more likely to work in overtime hours that remained unpaid.

Kylie Baullo the Vice President of ADP, said the spike in unpaid overtime is a major  concern as the national workforce moves in and out of lockdowns.

“We’re concerned that overtime hours worked remain. Unrecorded and therefore unpaid in Australia. There’s a greater impact as workers move in and out of lockdowns with the ever-changing health situation in their state,” said Kylie Baullo the vice president of ADP.

The new data has been published following the introduction of new Fair Work Annualised Wages legislation in March last year, which offers guidelines to employers to help capture hours of work, and encourage them to electronically record a staffer’s workday.

However, the legislation appears to have passed scores of employers by, Ms Baullo said, who in many cases mightn’t be aware of it, or how to put it into practice.

“Implementing the legislation is a challenge for small and large employers alike,” Ms Baullo said. “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 Kylie Baullo the Vice President of ADP.

The cohort of workers submitting to an additional 20 hours of unpaid overtime a week ballooned most markedly at the onset of the pandemic.

According to the data provided by ADP, that cohort swelled to 7 percent, an increase from 5 per cent pre-pandemic, and are mostly comprised of essential workers.

Kylie Baullo believes that it is important for employers to take notice of their obligations associating with having to pay their workers for overtime, as they could be exposing themselves to serious legal problems and in extreme cases possibly jail. The level of punishment they receive would depend on what state they operate in.

In July 2020, Victoria introduced new wage theft laws, employers could find themselves committing a criminal offense. Kylie Baullo expects other states across the country will soon follow suit and introduce tougher laws around unpaid labour.

“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 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 Kylie Baullo the Vice President of ADP.

When compared to the rest of the world, the Australian workforce finds itself in a moderately better position, at 7.3 hours a week, than the global average, which is 9.2 hours a week, according to ADP, up from 7.3 hours a week before the start of the covid-19 pandemic.

Close to 10 percent of the global workforce are now reported to be working in excess of 20 unpaid hours of work a week, up from the 5 percent that comprised the cohort before the covid-19 pandemic.

The APAC region leads the global index in unpaid overtime, where workers give up an average of 9.9 unpaid hours of overtime a week, up from the 8.5 hours reported before the covid-19 pandemic.

In Europe unpaid hours rose from 4.5 to 6.7. In Latin American workers reported an increase of two unpaid hours a week through the covid-19 pandemic, from 4.5 to 6.5.

Meanwhile, North American workers have reported the most marked increase, where the number of unpaid overtime hours doubled, from just four hours a week to 8.9, according to ADP.

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800. 

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)

Post Author: Craig Dangar

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