Wage theft, underpayment and employment regulation in Australia

Wage theft refers to the non-payment or underpayment of the full wages to which employees are legally entitled (Reference GalvinGalvin, 2016: 325; Reference Milkman, González and NarroMilkman et al., 2010; Reference Vosko, Grundy and TuckerVosko et al., 2017). Thus, wage theft is seen as arising from non-compliance with employment laws, and multiple types of wage theft reflect different kinds of violations. While violation of minimum wages regulation is the most ‘blatant’ type of wage theft (Reference WilsonWilson, 2011: 6), others include overtime violations, rest break violations, time ‘off-the-clock’ violations and illegal employer deductions (Reference Milkman, González and NarroMilkman et al., 2010).

There has been little research into the extent of minimum wage non-compliance in Australia (Reference Maconachie and GoodwinMaconachie and Goodwin, 2010; Reference Nelms, Nicholson and WheatleyNelms et al., 2011). Historically, with wide workforce coverage, union recognition and union membership preference provisions, the centralised industrial arbitration system has been characterised by relative ease of enforcement of standards, with trade unions playing a significant role (Reference Johnstone, McCrystal and NossarJohnstone et al., 2012: 27). In addition, a feature of the system has been a comparatively wide array of minimum employment standards contained in industry or occupation-based industrial awards including working time arrangements such as standard working times, minimum and maximum shifts, shift and overtime penalty payments, minimum call-back times and other rostering arrangements.

However, changes in the labour market and organisation of work and significant de-regulation and de-collectivisation of industrial relations (Reference Quinlan and SheldonQuinlan and Sheldon, 2011) have seen more employment likely to be affected by ‘gaps’ in regulation. Unchecked non-compliance with employment laws resulting in wage theft can be seen as arising from a regulatory gap whereby evasion is made possible by limits in enforcement. Other forms of regulatory gaps have contributed to the growth of employment forms with inferior rights and benefits, including lower payment for comparable work, although there may not be any violation of employment laws. Taking the range of protections of terms and conditions for full-time permanent employees as a normative standard, regulatory gaps exist for most workers outside this form of employment. Different forms of regulatory gaps contribute to inferior employment. Special rules and exemptions in employment regulation establish some forms of employment with diminished conditions and benefits (e.g. casual employment), while limits in regulatory scope leave some workers, such as self-employed contractors, entirely outside all or most employment law (Reference Pocock, Buchanan and CampbellPocock et al., 2004). An additional regulatory gap involves the absence of legal mechanisms for ascribing responsibility for pay and conditions to network lead organisations that, while not being the direct employer, control the way work is organised (Reference Johnstone, McCrystal and NossarJohnstone et al., 2012). All these types of regulatory gaps are relevant to the underpayment of social care workers’ wages, including wage theft through non-compliance.

Employment regulation is one important element in the broader institutional context in which wage theft and underpayment occur. Other social institutions also have significant influence. In the next section, we review some of the international evidence relating to working time in social care. This review highlights that employer practices leading to underpayments (including wage theft) are also strongly shaped by gendered norms of unpaid care work and the design of public social care systems.

Social care work, working time and underpayment of wages

International comparative research has shown there are real differences in social care systems in developed economies in regard to outcomes for social care workers (Reference SimonazziSimonazzi, 2009). However, in general, workers are low-paid and have poor working conditions (Reference Cristiano, Fernández and WittenbergCristiano et al., 2016; Reference Razavi and StaabRazavi and Staab, 2010). In the context of pressures to cut care costs, there is also convergence between care systems, to more home-based care, private provision and cash transfers for care recipients. From the developing international literature on working time and pay in social care we draw three insights especially relevant to our Australian study. First, analysis of the organisation of work shows work time has been excised from paid time, embedding unpaid time in home-based care work (Reference BoivinBoivin, 2016; Reference HayesHayes, 2017; Reference McCannMcCann, 2016). Second, the gendered nature of care work and strong norms of unpaid time combine with employer strategies and worker resistance to contribute to overwork and high levels of unpaid work (Reference Baines, Cunningham and ShieldsBaines et al., 2017; Reference HayesHayes, 2017; Reference Palmer and EvelinePalmer and Eveline, 2012). Third, public authorities and funding bodies maintain significant control over the organisation of work and over care workers’ pay and conditions, using time as the main control mechanism (Reference Atkinson and CrozierAtkinson and Crozier, 2016; Reference BoivinBoivin, 2016; Reference Rubery, Grimshaw and HebsonRubery et al., 2015).

Of particular relevance is the UK experience, as social care systems across Britain share many features with Australia’s developing individualised and marketised disability support system (Reference Macdonald and CharlesworthMacdonald and Charlesworth, 2016). Social care workers have been identified as at greater risk than other UK workers of not receiving the National Minimum Wage (NMW) (Low Pay Commission, 2016: xxvii), and it has been estimated that about half of social care companies have not met their minimum wage obligations (HM Revenue and Customs, 2013). Homecare workers – who provide care and support to frail aged and people with disability in private homes and the community – are particularly vulnerable to underpayment with one estimate that 60% of such workers are underpaid (Reference Bessa, Forde and MooreBessa et al., 2013: 27–28).

In particular, the social care workforce experience in England highlights how, by paying workers for only some of the time they work, ‘nominal’ wages may be above the statutory minimum wage but ‘effective’ wages can be much lower (Reference KoehlerKoehler, 2014: 5). In England, homecare workers have typically been paid only for contact time with care recipients and have not been paid for much of the work they perform, including the time they travel between private residences where they provide care (Reference HayesHayes, 2017: 135–138; Reference Rubery, Grimshaw and HebsonRubery et al., 2015). This has been considered to be wage theft (Reference HayesHayes, 2014) and recent legal challenges to the practice have strengthened regulation specifying that travel between work assignments must be paid (United Kingdom Government, 2017).

Similarly, until recently, homecare and DSWs in New Zealand were not paid for time spent travelling between ‘clients’, with Reference Briar, Liddell and TolichBriar et al. (2014) arguing this brought the employees’ hourly wages below the national minimum wage. Following a long-running campaign and a legal case pursued by the Public Service Association (PSA), a sector-wide arrangement for payment of travel time has now been introduced (New Zealand Parliament, 2015). In Europe, recent legal cases under the European Working Time Directive have also challenged the non-payment of homecare workers’ time spent travelling between home visits (Reference McCannMcCann, 2016).

Despite some ambiguity about travel as ‘work’ (Reference McCannMcCann, 2016), much other unpaid overtime undertaken by social care workers is undoubtedly work (comprising face-to-face client care and support, administration and communication). Non-payment of work time is underpinned by unfair job design with extremely tight specification of time and tasks and no provision at all for some aspects or for any variability in the work (Reference HayesHayes, 2017; Reference Moore and HayesMoore and Hayes, 2017: 103). In addition, work scheduling techniques that ‘drain waged-time from the working day’ and the devolution to workers of the risks of variable client demand result in fragmented, often varying and unpredictable work schedules: short periods of paid time (invariably face-to-face contact time with care recipients) are interspersed with other also fragmented, variable and unpredictable periods of unpaid ‘non-work’ time (Reference McCannMcCann, 2016: 44–45; Reference Rubery, Grimshaw and HebsonRubery et al., 2015). So, workers have long work days for little recompense, contributing to low pay. Gaps of unpaid time in the day may not be work but neither are they available to the worker as personal time (Reference BoivinBoivin, 2016: 301).

Non-payment of social care work is supported by the gendered legacy of care work as women’s work (Reference HayesHayes, 2017; Reference Palmer and EvelinePalmer and Eveline, 2012). With care work continuing to be mainly performed unpaid by women in the family, it is often regarded as performed for altruistic reasons and as unskilled and not deserving of decent pay. These norms have a powerful role in social care, influencing employer strategies and also workers’ preparedness to perform unpaid work. Furthermore, much social care work is performed in not-for-profit agencies that have long traditions and strong norms of volunteering that contribute to pressures on workers (Reference Baines, Cunningham and ShieldsBaines et al., 2017).

A final insight from the international literature concerns the role funding models and commissioning practices play in determining care workers’ pay and conditions. The UK and Canadian studies have identified the use of time as a control mechanism by public funding and commissioning bodies (Reference Atkinson and CrozierAtkinson and Crozier, 2016; Reference BoivinBoivin, 2016; Reference Rubery, Grimshaw and HebsonRubery et al., 2015). These bodies have no direct responsibility for the employment of care workers but nevertheless determine many aspects of care provision, including the organisation of work. They tightly specify ‘care quality’ and work on the basis of time and tasks, leaving employers with little scope in relation to workforce strategy. They determine the duration and scheduling of work and, through tight hourly based funding, they also determine pay.

The multiple factors underpinning the underpayment of homecare workers, including marketised, poorly funded care systems which build on a gendered legacy of care work as non-work, are now more visible in the Australian context of disability support work.

Method

Qualitative research combined collection of data from ‘working day’ diaries and semi-structured interviews with DSWs employed under the new NDIS arrangements. The purpose of collecting diary data was to explore working time arrangements and any unpaid work associated with DSWs’ jobs. Interviews explored employees’ experiences and views of their jobs, working time arrangements and pay.

Participants were recruited through advertisements in newspapers and job websites and through snowballing. We interviewed 22 employees providing home and community-based support services to people with disability. This article reports on analyses of interviews and working day diaries for 10 DSWs: a total of 20 interviews and 30 self-completed diaries. The 10 women all provided support and care under the NDIS. They were employed by 10 different service providers: four for-profit, five not-for-profit and one government provider. All worked in the same region that was one of the first NDIS implementation sites. At the time of the fieldwork in late 2016, the NDIS had been in place in the region for 3 years. The other 12 participants who are not reported on in this article were not providing NDIS services.

The 10 DSWs cannot be seen as representative of all DSWs working under the NDIS. However, this study can provide valuable insights into some of the ways in which work is being organised under the NDIS and impacts on employees. Despite the small sample size, our interviews were approaching saturation (Reference MorseMorse, 1995), with issues raised in interviews highly consistent across the 10 participants. While there was considerable dissimilarity in paid and unpaid work patterns recorded in diaries, common issues and themes emerged from all 10 workers’ diaries. The issues are also similar to those identified in recent surveys of DSWs and providers examining NDIS workforce issues (Reference Cortis, Macdonald and DavidsonCortis et al., 2017; NDS, 2016). Nevertheless, the data we present is indicative only and our findings warrant further investigation through a larger study.

Each DSW participated in two individual face-to-face semi-structured interviews with one of the researchers. In the first interview, each participant was asked about what her job/s involved, the support she provided, working time arrangements, rates of pay and likes and dislikes. At the end of the interview, the participant was given a paper ‘diary’ on which she was asked to record time, duration and a brief description of each work-related activity and ‘breaks’ for the next three work days. At the second interview (1–4 weeks later), the researcher went through the diary with the participant seeking additional details and views of the ‘diarised’ time use. Informed consent in writing was obtained from all participants. Participants were given retail vouchers in recognition of their time and in lieu of payment for any expenses incurred.

Analytic framework

To identify and quantify any apparent underpayment of employees’ work time, we categorised time recorded in the diaries as follows:

1. a. Paid work time.

2. b. Unpaid overtime comprising: support work and administrative work (paperwork, communications and meetings with supervisors, support recipients and families).

3. c. Unpaid travel directly between support recipients (for a single employer).

4. d. Other unpaid time in the work day comprising: unpaid travel between the employee’s home and work during and at the beginning and end of the work day; and unpaid ‘breaks’ between work-related activities.

We also recorded the length of the work day (e), defined as the duration of time from when the worker first left home in the morning until she returned home from her last shift for the day.

On the basis of our literature review, we considered that, on the face of it, time spent on (b) unpaid overtime and (c) unpaid travel directly between support recipients should undoubtedly be paid work time. In this article, we focus on these categories to investigate underpayment of wages for the DSWs. It is much more difficult to ascertain the extent of any wrongful underpayment for time in category (d) and, as it would require considerably more space to do so, we have largely excluded this time from our analysis. This time is, nevertheless, critical to the structuring of employees’ work days and pay as workers are often expected to travel long distances from home for very short shifts and can have their work scheduled so that they experience long periods of ‘dead’ time between shifts. Here, we have space to provide detail of this time only where it sheds light on the overall organisation and time structure of the work.

Overview of employees’ work and pay

In total, 9 of the 10 DSWs were multiple job holders: five worked in two or three different DSW jobs. Other jobs included aged care and residential support. The main reason women gave for holding multiple jobs was that their main job provided insufficient income. In their main job, seven women were permanent part-time and three were casual employees. Part-time employees had contracts specifying minimum hours, although these minimums were as low as 2 hours a fortnight. All employees had highly variable daily and weekly hours and all were regularly ‘expected’ to do additional work, often at very short notice. Part-time employees’ hourly rates ranged from AUD19.80 to AUD25 and casuals’ from AUD25 to AUD29, rates consistent with employment at or just above the relevant classifications in the SCHADS Award. Nine DSWs said they were paid penalty rates for weekend and evening work. The 10th said her employer told her she was paid penalties only when they were included in her clients’ NDIS support plans.

Only two DSWs (both employees of the same long-established and large service provider) were paid for time spent travelling between clients. However, seven DSWs (including those two), received a per-kilometre reimbursement for using their own cars when travelling between clients. Notably, the industrial award specifies employees must receive this reimbursement ‘where required and authorised by their employer to use their motor vehicle in the course of their duties’ (our emphasis) (SCHADS Award 2010:: cl 20.5(a)). All DSWs were reimbursed for using their cars to transport clients, as long as the distance was within the kilometre range specified in the client’s NDIS funding package.

Employees’ paid work time was primarily spent in direct contact with clients, providing in-home assistance, personal care and/or support for community and social participation. All 10 workers said they enjoyed or even loved many aspects of the work; they valued making a difference in people’s lives and enjoyed spending time with clients. However, most were unhappy with their pay and conditions and several were seeking other employment. The work aspect identified as a serious problem by all 10 workers was the way their working time was structured. Many frequently worked long days, 6 or even 7 days a week to try to earn an adequate income; yet many spoke of their difficulties earning enough to pay their bills. The women’s jobs often left them exhausted and with little time for friends and families.

The working day: The time diaries

The working day diaries documented a total of 30 working days (comprising 3 diarised days for each of the 10 DSWs). They reveal four important aspects of DSWs’ working days.

First, the diaries show that the DSWs’ days were typically made up of several relatively short paid work ‘shifts’ spent with support recipients, interspersed with often long periods of unpaid time. Over the 30 days, the 10 DSWs worked between one and five separate shifts per day. The shortest recorded shifts of paid work were around 30 minutes and the longest was over 10 hours. Most paid work periods were 2 hours or less. Second, the DSWs’ working days (from first departure from home for work to last arrival home from work) were long. Two-thirds of the 30 diarised days were 10 hours or longer. Third, though days were often very long, the proportion of the total working day that was paid work was often small. On 17 of the 30 work days, employees were paid for 5 or fewer hours’ work in the context of a long span of working hours. As an example, one day in DSW9’s diary showed that she left home at 8:45 am and finished her day 13.5 hours later, at 10:15 pm, having completed four shifts and earned only 5 hours’ pay. This pattern of paid work was not uncommon: the diaries showed that for each worker, on average over their 3 working days, paid work time was between 27% and 73% of the working day (Table 1). Fourth, the diaries showed very substantial periods of the working day consumed by unpaid activities, structured and often occupied by work.

Table 1. Disability Support workers’ paid and unpaid work time for 3 days^w.

DSW: disability support worker.

w Times are reported in hours and minutes.

x DSW employed by more than one disability support provider.

y Administration time adjusted as one employer paid for 30 minutes a week.

z DSW paid for travel between clients by one employer.

In the presentation of findings below our focus is on the unpaid work time employees spend travelling between clients and undertaking support and administrative work, time that apparently should be paid work time. However, the organisation of disability support work often renders unusable as ‘free’ or ‘personal’ time much other time in a worker’s day. For example, workers spent time travelling back and forth from home to work in breaks between periods of paid work, and they often found themselves too far from home to make it worthwhile returning so they simply waited somewhere near their next client’s home.

Turning to the unpaid work that clearly directly contributes to underpayment, all 10 DSWs undertook unpaid work either travelling between clients or unpaid overtime (administration and face-to-face support), or both, over the 3 diarised days. For individual workers, the total amount of such unpaid work undertaken over the 3 days ranged from 22 minutes to over 6 and a quarter hours. For some DSWs, unpaid work time was equivalent to a third or more of paid work time in a single day and comprised up to 25% of the duration of the working day (Table 1). If all travel between clients and overtime had been paid, these employees would have received between 2% and 27% more pay than they actually received for the 3 days. In the discussion that follows, this unpaid work and the factors driving it are examined in detail.

Unpaid work: Travel between clients

Travel to clients’ homes is an essential part of home and community-based disability support work. The amount of unpaid travel directly between clients varied considerably among the 10 employees on the 3 diarised days. The two women who were paid for the time they spent travelling directly between clients had paid travel time in their enterprise agreement with the same long-standing service provider. Our interviewees informed us, and it was later confirmed, that this provider had ceased providing disability support services because they could not afford to do so under the NDIS. For other DSWs unpaid travel between clients was equivalent to between 1% and 15% of the employee’s paid time over the 3 days, and as much as 25% in a single day. One DSW spent an hour and a half travelling directly between clients in a single day. A total of 15 of the diarised days showed no unpaid travel directly between clients, but this was often because employees had large unpaid gaps between paid work periods and went home before travelling to the next client.

Most interviewees raised the issue of unpaid travel time as a major shortcoming of the job, particularly when paid work periods were short and the ratio of unpaid to paid working time was high. Women’s gave a variety of explanations for undertaking shifts that involved at lot of unpaid travel and little paid work. For some it was a sense of responsibility to clients, a manager or both. Fear of jeopardising further work opportunities was often cited as a strong motivator for not refusing shifts. One DSW who had been in her job under 6 months was very conscious of the impact of travel time on her effective pay rate and also found the driving stressful:

Yet this employee was unwilling to complain about her pay and conditions as it had been difficult for her to find work. This sense of vulnerability may have been well-placed: another DSW, who had consistently refused to take certain poor shifts, believed she had been punished by having work taken away. By comparison, a very experienced worker reported resisting or refusing shifts where the ratio of paid to unpaid work was too low:

However, this DSW spent nearly 2 hours travelling directly between clients over the 3 days, unpaid and without a car allowance.

Unpaid work: Overtime providing support and undertaking administration

A second type of unpaid work was the additional time DSWs spent providing support to clients and undertaking administrative tasks. Five of the ten employees accrued 50 minutes or more of such unpaid work over the 3 days. For four workers, this was equivalent to 10% or more of the time they were paid for work.

This form of unpaid work appeared endemic. Six of the ten employees provided unpaid support on 29 occasions over the 30 recorded days. Though often only for short periods this unpaid work added up to between 15 and 50 minutes over the three days. Employees’ fragmented work schedules meant that this additional work was often absorbed into unpaid time between scheduled support for clients – rendering it invisible to the employer. Contributors to unpaid support included unexpected events (e.g. client illness), unpredictable behaviours, client requests for extra supports; new/unfamiliar clients; family carers returning home late, and mismatches between client needs and funded supports, as described here:

Administration work was a further significant component of unpaid overtime. Eight of the ten employees completed multiple, often small, amounts of unpaid overtime every day. The range of unpaid administrative tasks included: completing client notes and incident reports, communicating with supervisors about client needs, organising rosters and extra shifts and completing travel forms and timesheets. Most tasks were central to client care and/or the organisation of work. While one organisation paid employees 30 minutes a week for administration, DSWs were not otherwise allocated paid time for these tasks which often consumed considerable amounts of time and could be highly disruptive to personal time. One employee, who had many serious concerns about her clients, spent nearly 4 and a half hours over the 3 days writing up client notes, usually very late at night. This unpaid administration was equivalent to almost 20% of her paid work time. Another seven employees undertook between 10 minutes and just under 2 hours of unpaid administration over the 3 days. Two employees did no unpaid administration work at all.

DSWs gave two main reasons for undertaking unpaid work. Many workers did so out of a personal commitment to providing good quality, and usually essential, care. This included one employee who said she and colleagues arranged staff meetings in unpaid time to induct new staff and discuss clients’ support needs. Most employees linked their unpaid overtime to job insecurity and some reported responding to pressure to complete additional unpaid tasks at clients’ request because they feared losing shifts if a client requested a different support worker.

In theory employees could claim pay for some of their unpaid overtime while in practice it was often difficult or impractical to do so. One employee commented: ‘I mean I guess if we specifically rang our boss and we’re like “hey, this ran 15 minutes over, I’m going to put it on my timesheet,” and they knew, then we would. But if it happens every single day, I don’t think that many of us really ring her every single day. And she’s very hard to contact as well’ [DSW10]. Nevertheless, employees sometimes accepted responsibility for not claiming time:

In some cases, explicit organisational arrangements required employees to absorb unpaid work without remuneration. Further, employees articulated it was in their best interests to undertake this work in order to have better outcomes for clients. For example, one employee (DSW5) explained that it was in her position description to arrive at work 10 minutes before the commencement of her paid work. While she considered this ‘a nuisance’ it also enabled her to talk with the client’s family carer and get any issues ‘sorted’.

Finally, workers’ sense of insecurity and lack of support in challenging their working conditions was often evident in their explanations for undertaking unpaid work. One employee feared losing shifts if she ‘rock[ed] the boat’ (DSW2), another said she was afraid of ‘making ripples’ and risking confrontation (DSW5), and others reported they had been ’punished’ with removal of shifts for attempting to challenge an employer (DSW1) and for refusing to take poor shifts (DSW8). In contrast the two employees of the large long-established and highly unionised service provider reported numerous instances of challenging management to improve conditions for workers.

The financial cost to employees of the unpaid work of travel between clients and overtime was significant, even for those who undertook relatively little unpaid work. For five of the ten employees, 2%–6% of their work over the 3 days was unpaid. On the basis of the standard hourly rate each DSW was paid (i.e. disregarding any penalty rates), we estimate those five employees were underpaid by between AUD8.84 and AUD30.42 over the 3 days. The other five DSWs were not paid for 12% or more of their work time, including one who was not paid for 21%. That employee, who had both the highest number and proportion of unpaid work hours, was underpaid by around AUD180 over 3 days. The remaining four employees were underpaid by between AUD24.75 and AUD92.08 over 3 days.