Some of Australia’s biggest insurance brands have back-paid workers more than $37 million in unpaid entitlements.
Insurance Australia Group Limited (IAG) entities have back-paid workers more than $21 million in unpaid wages and signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman. In addition, they have back-paid workers $16.2 million in long service leave entitlements.
In a statement, The Fair Work Ombudsman said IAG, Australia’s largest general insurer under brands including NRMA Insurance, RACV, CGU, SGIO, Swann Insurance, WFI and ROLLiN, self-reported non-compliance issues to the regulator in December 2020.
IAG entities have back-paid more than 19,000 current and former employees more than $21 million in wages and entitlements that was owed between 2013 and 2023, plus several million dollars in interest and superannuation.
Overall, the average back-payment was just over $1000, though 14 workers have been back-paid more than $200,000.
In addition, the IAG entities have back-paid workers a total of $16.2 million in long service leave entitlements that was owed under state and territory laws between 2013 and 2022.
State and territory based long service leave entitlements are not part of the Fair Work Ombudsman’s jurisdiction, but the payment formed part of IAG’s remediation program.
IAG identified the underpayments when it conducted an internal review.
The Ombudsman said the underpayments were caused by basic shortcomings in the IAG entities’ processes, including not having time and attendance systems in place, resulting in them not paying employees for their actual hours of work.
Underpaid workers were located in every state and territory in Australia and were engaged in a range of positions.
IT professionals, IT support workers, frontline claims staff and call centre staff were among the most frequently underpaid workers.
The Ombudsman said an EU was appropriate as IAG had commenced a major overhaul of its compliance and governance systems that would protect its workers, and executed a widespread remediation program that included rectifying significant underpayments going back to years beyond the six-year statute of limitations.
IAG must also make a $650,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.
