Crown Resorts is on the hook for hundreds of millions of dollars due to its inability to play by the rules in Australia. That makes the AU$1.2 million (US$801,120) it has had to pay to former and current workers over an accounting discrepancy seem like pocket change. While the casino operator has already repaid most of the money, it still needs to find eight more, and the clock is ticking.
Crown, which illegally helped money launderers and facilitated other criminal activity, uncovered the discrepancy three years ago. There were 200 current and former employees it had shorted in their paychecks.
The Australian government’s Fair Work Ombudsman (FWO) reported last Friday that the company has caught up with 192 of those. However, it hasn’t been able to locate the remaining eight.
Where it Began
In March 2020, Crown informed the FWO that it had made a clerical error in calculating certain employee pay rates. The report followed an announcement by FWO boss Sandra Parker that sought better transparency with regard to payroll compliance from Australia’s top companies.
Specifically, according to Crown, an internal audit discovered that the payroll specialists at Crown Melbourne and Crown Perth had screwed up. As a result, from July 2014 to June 2020, some employees were incorrectly categorized, which prevented certain salary adjustments.
As I called out to the ASX top 100 in early 2020 and have said consistently, ever since – employers need to place a high priority on their workplace obligations. Crown’s failures to apply relevant awards to some of its employees and to ensure annual salaries met all minimum entitlements for hours worked led to long-running underpayments of its staff, and a larger remediation bill,” said FWO boss Sandra Parker.
Those adjustments should have come in the form of “awards” in four categories, including “penalty rates, minimum hourly rates, overtime, and paid leave rates.” Because of the clerical error, none of the calculations was made and the 200 employees lost out on normal benefits.
The discrepancy apparently hit all levels of employment at the two casinos. The FWO announcement explains that it impacted full- and part-time employees who worked in everything from beauty salons to restaurants to administration and “other roles.”
Where it Led
After Crown came clean, it determined that it owed AU$1.025 million (US$684,290) to the employees. The FWO bumped the amount up to AU$2 million to cover superannuation (a retirement savings plan) costs and 10% interest.
In addition, the two Crown properties had to pay a “fine” of sorts, although it wasn’t officially called that. They had to pay AU$350,000 (US$233,660) as a “contrition payment” to help them remember not to make the same mistake again.
So far, Crown has been able to repay the majority of the affected workers. Crown Perth had 90 employees to whom Crown had to pay between AU$5-55,192 (US$3.34-36,846). All have received their money.
Crown Melbourne had 110 workers to find, with payments ranging from AU$22-66,714 (US$14.69-44,538). It’s found most, but eight more remain elusive.
An agreement between the FWO and Crown, called an Enforceable Undertaking (EU) puts a limit on the time Crown has to complete the repayments. The EU, which it signed last Friday, expires in 180 days.
The agreement also requires Crown to have two third-party audits conducted in order to review compliance with workforce laws. In addition, it must publish the EU in two newspapers, its Facebook page, and on its website. There must also be notices in its workplaces, as well as a telephone hotline and email address for inquiries.
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