Over $730,000 in Unpaid Wages Recovered from Franchises
                     Over $730,000 in Unpaid Wages 
Recovered from Franchises
$731,648 in unpaid wages has been recovered after a 
national investigation into emerging fast food, 
restaurant and café franchises. Almost 80% of stores 
were found to be breaching the law. More than 50% 
had underpaid staff.
Fair Work Inspectors audited franchises that have 
recently commenced operations in Australia - Chatime, 
GongCha, Hot Star Chicken, PappaRich, Sushi Izu, Nene 
Chicken and The Sushi 79.
Franchises were selected based on intelligence data 
that raised concerns about compliance with workplace 
laws, including anonymous tip offs, requests for 
assistance and stakeholder referrals.
Six of the seven emerging franchises were founded 
overseas - five in Asia and one in the USA.
During the audits, Inspectors questioned employers 
and employees in 76 stores and assessed time and 
wages records. Inspectors found that almost 80 per 
cent of the stores they visited breached at least one 
workplace law.
More than 50 per cent of all businesses audited had 
underpaid staff.
The most common workplace law breaches related to 
pay slip obligations, penalty rates and other minimum 
hourly rates of pay, and record-keeping.
The Fair Work Ombudsman said the audits confirmed 
concerns about new franchise brands, often from 
overseas, starting operations without due diligence on 
workplace law compliance.
In response to the breaches, Inspectors issued 38 
contravention letters, 13 infringement notices (totalling 
$8780 in penalties for pay slip and record-keeping 
breaches), eight compliance notices (requiring back-
payment of $61,745 for 68 employees) and 26 formal 
cautions.
Recoveries of underpayments have occurred from 40 
businesses, with more recoveries possible in relation to 
matters still before the court.
The Fair Work Ombudsman also commenced court 
action against six companies allegedly involved in the 
most serious breaches, including the operator of three 
PappaRich outlets in Sydney, a former Chatime 
franchisee in Sydney, a company and two of its 
directors operating two The Sushi 79 stores in Brisbane, 
and the Chatime Australia franchisor Infinite Plus.
In August, the Federal Circuit Court ordered total 
penalties of $125,700 in the The Sushi 79 action. In 
November 2019, the FWO also secured $307,802 in 
penalties in the Papparich action.
Every week, we are helping many small businesses 
around Australia move away from manual payroll 
systems and with their payroll wage calculations. If you 
need some help, or are not sure whether you are 
compliant, reach out for a confidential chat.