HR Compliance: Lessons from Hamilton Island’s Nearly $30 Million Underpayment

Hamilton Island’s recent $30 million underpayment serves as a stark reminder that non-compliance can happen to anyone. Situated in our backyard, this high-profile case underscores the importance of regularly reviewing your employment practices to ensure HR compliance with pay, Award interpretation, entitlements and so much more. This is where we specialise and can help with that peace of mind.

What HR Compliance Nightmare Happened on Hamilton Island?

Hamilton Island Enterprises has entered into an enforceable undertaking with the Fair Work Ombudsman after discovering systemic underpayments affecting both current and former employees. As part of this agreement, the company must repay nearly $30 million in back wages as well as pay a significant amount in contrition payment. Additionally, they are now subject to ongoing audits and mandatory compliance measures, including:

• Establishing a dedicated employee hotline
• Conducting compliance training for staff
• Recruiting a compliance officer
• Holding employee feedback sessions every three months
• Reporting regularly to the Fair Work Ombudsman

Who Was Affected?

The underpayments primarily impacted employees covered by the Hospitality Industry (General) Awards 2010 and 2020, which are commonly applied in tourism hubs like the Whitsundays. Affected roles included:

• Food and Beverage Supervisors
• Assistant Restaurant Managers
• Chefs
• Front Office Employees
• Clerical Employees
• Housekeeping Staff
• Handymen
• Concierges
  

Notably, underpayments were not limited to casual or hourly workers—salaried employees were also impacted.

The Danger of ‘Set and Forget’ Salaries for Employers

One of the most common compliance mistakes employers make is assuming that a set salary covers all Award entitlements. Salaries must be carefully calculated from the outset and reviewed regularly to ensure they meet minimum Award conditions, including overtime, penalty rates, and allowances. They need to be reconciled at least annually and in many circumstances more frequently. Without these checks and balances, businesses risk serious underpayment issues.

How We Can Help

Ensuring compliance with workplace laws is not just about avoiding penalties, it’s about protecting your business reputation and fostering a fair, engaged workforce. Our expertise lies in:

• Conducting compliance health checks
• Identifying risk areas in payroll and Award interpretation
• Offering practical solutions to maintain compliance
• Recognising and celebrating where your business is already excelling
  

Stay Ahead of Compliance Risks

If Hamilton Island, one of the region’s most prominent employers, can face a compliance crisis, it can happen to any business. Don’t wait until an audit or employee complaint uncovers underpayments. Take proactive steps now to ensure your business is on track with employment law requirements.

Get in touch today for a compliance health check and safeguard your business from costly mistakes.