70% of Aussies work for free as pandemic unpaid overtime soared

Kylie Baullo, Vice President in charge of Client Service in Asia Pacific for ADP

The average Australian worker is putting in almost an extra day’s work every week without corresponding payment. This is according to new data from global payroll leader ADP.

This is the equivalent of $12,600 per year based on the annual average salary.

The survey of almost two thousand Australian workers furthermore, revealed that levels of unpaid overtime are on the increase compared to before the COVID-19 pandemic era.

ADP’s People at Work 2021: A Global Workforce View

Workers are get an average of 7.3 unpaid hours weekly, up from 5.8 pre-pandemic. 

Unpaid overtime includes working during unpaid breaks and starting early or staying late, to regularly putting in several hours of extra work each day for no additional pay.

The increasing numbers of unpaid overtime suggest that businesses across Australia are breaching changes to Fair Work legislation introduced last year to protect workers.

Kylie Baullo, Vice President in charge of Client Service in Asia Pacific for ADP said, “We are concerned that overtime hours worked remain unrecorded and therefore unpaid in Australia.”

“There’s a greater impact as workers continue to move in and out of unexpected state lock downs with the continuously changing health situation in their respective states.”

Fair Work Annualised Wages legislation which was introduced in Australia in March 2020 provides employers with guidelines to facilitate them capturing hours worked.

These Fair Work rules require organisations and businesses to electronically record the hours employees work and reconcile them against the Award and paid salary per pay cycle.

“We are increasingly finding this legislation has passed many by. There’s both a lack of awareness around the legislation, or around what it means to put into practice.”

“Implementing the legislation is a challenge for small and large employers alike. For small businesses, the challenges lie around HR systems, capabilities or capacity,” said Baullo.

“For large companies, its complex to work across a large workforce and multiple awards.”

“Depending on what state an employer is based in, the consequences of underpaying employees range from a financial penalty all the way to criminal conviction.”

“The State of Victoria introduced new wage theft laws just in July 2021.”

“It is a criminal offence for an employer in Victoria to deliberately underpay employees or dishonestly withhold employee entitlements. We expect other states to follow.”

“Employers have to think about the hours worked by people on annualised salaries. This change has introduced that requirement and COVID-19 has made it even more complex.”

“We know that businesses are struggling but there is need to implement these changes. Fair compensation of employees is not just the morally right thing to do, but the law.” 

Insights from ADP’s global workforce view

More than two thirds (70%) of workers are working unpaid overtime each week. Workers are giving away an average of 7.3 unpaid hours per week, up from 5.8 pre-pandemic. 

Approximately a quarter of the Australian workforce are putting in more than eleven hours of unpaid overtime per week which represents a 10% increase from pre-pandemic. 

The proportion of workers in Australia putting in an excess of 20 hours per week for free has also risen to 7%, up from 5% in the previous year.

Many workers exceeding 20 hours unpaid overtime weekly were classified as essential workers.

Hybrid offices and home arrangements have been susceptible to racking up extra unpaid hours, compared to those who remained on-site throughout lockdown and restrictions.

Aussies fared slightly better than the global average for unpaid overtime of 9.2 hours per week, according to the findings of the survey of more than 32,000 workers in 17 countries. 

The new data is part of the ADP Research Institute’s People at Work 2021: A Global Workforce View worldwide study into the future of work.