There is a small inner-Melbourne bakery chain known as All Are Welcome. They have three cafés and with more than 22,000 followers could be considered insta-famous. But behind their perfect profile they held a dirty little secret.
You see, each time staff got paid they took comfort in seeing their super contribution displayed on their pay slip. But little did they know that the owner was pocketing their super to pay other business debts.
All Were Welcome is now a more fitting name as the business finally closed its doors last Sunday. This is after it first went into voluntary administration in February, before the owner repurchased it in a fresh entity in April. It is estimated that staff are owed $243,000 in super and $125,000 in leave entitlements.
Sadly, wage theft is not uncommon. Griffith University has just admitted to underpaying staff by $8.34 million, including underpaid super, and who can forget Woolworths’ $750 million workforce fleecing. It’s estimated that employers fail to pay around $5.2 billion in compulsory super contributions per year.
As a business owner I can’t think of many things more morally corrupt than spending your loyal teams’ hard-earned retirement savings. Not even if that’s what it takes to keep the business alive. It’s just not yours to spend.
In welcome news for all, there are a couple of initiatives intending to address this long-standing issue.
The first is that from January 2025, wage theft became a criminal offence. This extends beyond business owners to payroll managers and accountants where their conduct contributes to an intentional underpayment.
The second will align employee super with business pay runs, so that super must be remitted in real-time. This is a smart idea that piggybacks off other real-time systems like single touch payroll, which has been reporting payday information to the ATO since 2018.
But with typical political torpidity, it took Government two years to draft legislation following the 2023 announcement, which to date is still unpassed. The intended start date is July 2026, which to me is just three more unnecessary years of lost employee retirement savings.
Real-time super is not just for catching unprincipled employers, it also means your super goes to work earlier. A median-earning 25-year-old could be around $6,000 better off by retirement.
The twice failed All Were Welcome owner says he will try to “minimise any harm” as part of the “journey to unwind everything”. If he were truly welcoming, he would have extended that to how he valued and protected his workers along the way.
Until our politicians and business owners treat super with the same urgency and respect as wages, they too are not honouring that welcome, they are exploiting it.
by MARK DOUGLAS
FCPA
Managing Partner of Francis A Jones
www.faj.com.au