Crown reported the error to the Fair Work Ombudsman (FWO) in March 2020 after a letter about prioritising payroll compliance.
The underpayments impacted approximately 200 employees at the Crown Melbourne and Crown Perth casinos between July 2014 and June 2020.
This, Crown said, was due to it incorrectly identifying some workers as award-free. Thereby, Crown underpaid them by failing to meet its obligations under four different awards that applied. Crown also failed to keep all employee records.
According to the FWO, staff were underpaid entitlements including penalty rates, minimum hourly rates, overtime and paid leave rates. Crown signed an Enforceable Undertaking (EU) with the FWO to rectify the mistake.
The staff in question were underpaid $1.0m, excluding superannuation, interest and gratuity. The additional $200,000 Crown agreed to pay covers superannuation and an additional 10% in interest and gratuity payment.
Crown has made back payments to 192 of the current former employees. The EU states the operator Crown must complete back payments to the other eight former employees within 180 days.
Meeting lawful entitlements
“Under the EU, Crown has committed to implementing stringent measures to ensure all its current and future workers are paid correctly,” FWO Sandra Parker said. “These measures include commissioning, at its own cost, two independent annual audits to check its compliance with workplace laws.
“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.
“All employers need to invest the time and resources to ensure they are meeting all lawful entitlements.”
Crown acknowledged the EU, with a company spokesperson saying it also apologised to all those impacted by the error.
“Crown takes its obligations as an employer seriously and self-reported to the FWO in 2020 following a comprehensive payroll review,” Crown said. “Since the errors were identified, Crown continues to focus on reviewing its payroll processes. We are investing in upgrading its workforce management systems and strengthening its compliance framework.
“As part of the EU, Crown will make a contrition payment and has committed to independent audits for the next three years to ensure ongoing compliance.”
The EU comes days after Crown was handed a $20.0m fine for breaching tax rules in Victoria. This was in response to findings published by the 2021 Royal Commission into the Casino Operator and Licence (RCCOL).
The RCCOL said Crown improperly claimed tax deductions by including the costs of certain promotional activities as amounts paid out as winnings. The operator’s Crown Melbourne operates in Victoria.
The operator was also found to have deliberately concealed the nature of these deductions from the state’s regulator during the focus period of 2013 to 2021.
This was the fourth time the Victorian Gambling and Casino Control Commission (VGCCC) used stronger enforcement powers to take disciplinary action against Crown for conduct uncovered by the Royal Commission.
Since receiving these powers, the VGCCC has imposed fines on Crown totalling $250.0m.