Recently, there has been significant media attention on underpayments and ‘wage theft’. This may have led many employees to reflect on whether they were underpaid in previous employment. This leads to the question, are employers able to recover underpayments from former jobs?
Can an employee bring a claim for historical underpayments?
In short, the answer is yes.
In Australia, under the relevant limitation of action legislation, a claim for underpayments in employment must be brought within six years. This means that employees can still recover underpaid wages up to six years after the underpayment occurred. This is so irrespective of whether the employee is still employed by the underpaying employer.
For example, on 1 January 2020, employees can still recover any underpayments that occurred after 1 January 2014.
How can employees determine if they have been underpaid?
Whether an employee has been underpaid is a complex question of fact and law. This depends on, among other things, the employee’s contract, the duties the employee performed and the award (if any) the employee is covered by.
Consequently, if an employee thinks that they might have been historically underpaid, or are currently being underpaid, they would be wise to seek urgent legal advice.