Jane Lindhe Reporter

Jane is a retail and small business writer with a special interest in emerging companies and entrepreneurs. She covered the financial services industry before moving into general business journalism and has written for The Age and The Australian Financial Review.

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Entitlements crash as businesses pay cash

Published 04 October 2012 04:11, Updated 04 October 2012 04:16

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One in four young employees are being paid cash-in-hand by their employer and forgoing legal entitlements such as sick leave and superannuation, a study commissioned by the Victorian Trades Hall Council and the ACTU has found.

The ACTU has used the study to accuse businesses of exploiting young employees.

“The illegal use of cash-in-hand payments to workers is one of the dirty secrets of the Australian economy,” ACTU president Ged Kearney says.

The national survey of more than 1000 employees found that one in 10 people are working so-called “black market jobs” and up to 60 per cent of those jobs did not pay superannuation, annual leave, sick leave or penalty rates.

While employers face hefty fines for avoiding their taxation obligations, the study shows there is a growing trend for young people to accept cash in hand as a condition of employment.

Tax-paying companies are disadvantaged by illegal, cash-in-hand businesses, Kearney says.

“The majority of businesses do the right thing and pay the taxes they are required to,” she says. “They should be outraged by this behaviour because it means they are forced to compete with companies that have an unfair advantage.

“Cash-in-hand work, like sham contracting, hurts workers and businesses that do the right thing and pay their tax and entitlements.”