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The FWO found the hairdressing salon had underpaid the worker and required her to make cashback payments to assist her visa sponsorship status.
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Salon penalised almost $300k for abuse of a visa worker
14 April 2023
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10 minute read
The Fair Work Ombudsman (FWO) has secured more than $291,000 in penalties and back-payment orders in court against the former operators of a Sydney hairdressing salon that underpaid a South Korean worker through an unlawful cashback scheme.
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The federal circuit and family court imposed a $100,000 penalty against Yeon Beauty Salon Pty Ltd which operated the Yeon Art Hair salon in Eastwood, along with a $39,091.50 penalty against the company’s sole director Mi Yeon Ha.
Fair Work inspectors investigated the salon after the impacted worker requested assistance.
They found the worker had been underpaid more than $49,000 due to an underpayment of her minimum wages, overtime pay and penalty rates for weekend, and public holiday work under her award.
The worker was also found to have been unlawfully required to repay a total of $105,609 of her wages and entitlements to Ms Ha, which she was told were to cover leave entitlements and amounts associated with her visa including training fees, accountants fees, tax and superannuation.
The FWO established that the breaches had occurred between 2015 and 2019 when the South Korean national was sponsored by the company on a subclass 457 skilled work visa as a hairdresser.
Inspectors also found the salon breached workplace laws by failing to make and keep records, on occasion issuing the worker false and misleading payslips and also regularly failing to issue any payslip at all.
In addition to the penalties the company and Ms Ha were ordered to pay the worker $103,036.25 plus interest, and the company an additional $49,577.17 compensation plus interest to rectify the underpayments and cashback payments.
The impacted worker provided evidence that she had not asked any questions regarding the cashback payments to Ms Ha as she did not want to harm her possibility of working in Australia.
She also revealed when she later asked Ms Ha to provide her with payslips she was met with a reply along the lines of “I am doing so much for you, as your working visa sponsor, you will get permanent residency, if you are asking me all these questions and being difficult, it’s not good.”
Judge Robert Cameron said he was not under the impression that Ms Ha felt any remorse for her treatment of the worker and needed to impose penalties to deter her and other employers from similar conduct in the future.
“I accept that it is important that penalties be set at a level such that they are not an acceptable cost of doing business, and so tend to discourage repetition or emulation of the contraventions,” said Judge Cameron.
In the past five financial years, the FWO said it had filed 126 litigations involving visa-holder workers and had secured more than $13.4 million in court-ordered penalties.
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