Date Range

December 2014 – December 2022

Amount Owed

Total repayments of $28.1 million, including $6 million in interest and $500,000 in superannuation

Number of Affected Workers

2,152 workers repaid; 32 workers still owed $261,938

Common Roles Underpaid

Handymen, concierges, food and beverage supervisors, chefs, assistant restaurant managers, front office and clerical employees

Cause of Underpayment

Insufficient annual salaries failing to cover minimum award entitlements, especially for overtime, shift work, and penalty rates

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Introduction
Hamilton Island Enterprises Limited (HIE), the operator of the luxury Queensland holiday destination Hamilton Island, has been found to have underpaid thousands of its workers by nearly $30 million. Following an investigation by the Fair Work Ombudsman (FWO), HIE has repaid $28.1 million to 2,152 current and former employees. Despite this significant repayment, 32 workers remain unaccounted for, with a total of $261,938 still owed to them.

The issue was uncovered during an FWO probe launched in 2020, which revealed widespread underpayment across various roles, including handymen, concierges, chefs, and front office staff. The scandal highlights systemic issues within wage practices and serves as a stark reminder of the importance of compliance with labor laws.

Details of the Underpayment
The investigation identified that most underpayments occurred because HIE paid many full-time employees annual salaries that failed to cover their minimum award entitlements. This included overtime rates, weekend and public holiday penalty rates, broken-shift allowances, and annual leave loading. Employees working overtime or irregular shifts were particularly affected, with some receiving significantly less than they were legally entitled to.

One worker was reportedly underpaid $119,446, while the average underpayment amounted to $8,000 per employee. The majority of those impacted worked under the Hospitality Industry (General) Awards 2010 and 2020, reflecting the prevalence of these issues in the hospitality sector.

Response and Rectification
As part of an enforceable undertaking (EU) agreed upon with the FWO, HIE has committed to rectifying all underpayments dating back to December 2014. By June 30, the company must ensure all outstanding payments are made, including interest and superannuation contributions. Additionally, HIE will make a contrition payment of $750,000—$500,000 to the Commonwealth Consolidated Revenue Fund and $250,000 to the not-for-profit Cleaning Accountability Framework.

Fair Work Ombudsman Anna Booth praised HIE’s commitment to addressing the issue, stating that the company demonstrated a strong willingness to rectify its non-compliance and implement measures to prevent future breaches. However, she emphasized the broader problem of underpayments across industries, urging employers to adopt more vigilant approaches to wage management.

Legal and Compliance Considerations
This case underscores the critical need for businesses to adhere strictly to labor laws and regularly review their payroll systems. Employers cannot rely on “set-and-forget” salary structures without considering the actual hours worked and applicable penalties. Non-compliance can lead to substantial financial penalties, reputational damage, and ongoing legal scrutiny.

The FWO encourages any worker who suspects they may have been underpaid to use the search function on its website to check for outstanding entitlements. For those employed by HIE or its subsidiary, Hamilton Island Shared Services Pty Ltd, this step is crucial to ensuring they receive what they are owed.

Company Background
Hamilton Island Enterprises Limited operates one of Queensland’s premier tourist destinations, offering accommodation, dining, retail, and leisure facilities. While known for its luxurious offerings, the company now faces scrutiny over its internal wage practices. Most affected workers were based on Hamilton Island, though a smaller number worked at HIE’s corporate headquarters in Sydney through its fully-owned subsidiary, Hamilton Island Shared Services Pty Ltd.

Final Remarks
The Hamilton Island wage scandal serves as a wake-up call for businesses nationwide. It highlights the importance of transparent wage practices and regular audits to ensure compliance with labor standards. As investigations continue and remaining payments are tracked down, it is hoped that this incident will prompt other companies to reassess their wage policies and prioritize fairness for their workforce.

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