Young people ripped off by cash-in-hand work
New research shows one in four young people are illegal workers, being paid cash in hand by employers dodging the tax system.
The research, commissioned by the
Victorian Trades Hall Council and the Australian Council of Trade Unions and provided exclusively to triple j's Hack, shows young people are being ripped off and sometimes put in danger.
"The areas where we know these jobs are being used are less likely to be unionised, they're less likely to have Occupational Health and Safety representation and these jobs mean people are getting underpaid," Keelia Fitzpatrick, a youth officer with the council, told Hack.
"So they're overall detrimental, despite casual employment being convenient.
"It is quite concerning given how prevalent it is amongst young workers."
Nate, 23, has experienced how dangerous being a black market employee can be.
He was injured while working as a builder's assistant.
"We were putting up the second floor to a house and we were putting together the walls. I was holding it together and he's fired the nail gun and its gone straight through the wood and into my hand," he said.
"It drew blood. He just laughed and said 'just pull it out, you'll be right'.
"It took a few days to heal up."
The research found:
One in four people aged between 18 and 30 have recently done cash-in-hand work.
Being off-the-books impacts on young people receiving:
- penalty rates
- superannuation
- annual leave
- sick leave
- job and or skills training.
34 per cent of cash-in-hand workers did so for less than three months.
14 per cent did so for more than two years.
It was not the only time Nate had a close call on the job. One day he nearly fell off the second storey of a house.
"A wind picked up and I was holding a piece of wood, the wind has picked up the framework and pushed it over (the side of the house)," he said.
"I couldn't hold it and I let it go in the end because I wasn't going over for anybody."
Nate was not using any safety gear at the time and quit the job shortly after that.
'Lowering standards'
Ms Fitzpatrick says the union movement is worried that cash-in-hand employment could be lowering standards.
"Off the books employment is another level of unsafe and insecure employment that we're concerned is going to impact not just people individually in their safety and their conditions at work but the industries that they're working in more broadly," she said.
"We're worried that it is going to undercut standards in these industries where young people do work."
She is calling on the Federal Government to act.
"It's illegal so we would like to think the Federal Government will take notice of this issue because it does facilitate people rorting systems like Youth Allowance, but the bigger picture is this work is increasingly looking like its unsafe."
One student who did not want to be named says he likes cash-in-hand because he does not want to worry about going over the tax-free threshold and losing part of his Youth Allowance.
"Not having to declare for tax reasons is really helpful, because it helps you work when you want to... it's good for flexibility," he said.
The Australia Institute's executive director, Dr Richard Dennis, says there is a common misconception among young people about how much tax they will have to pay.
"There's a big tax free threshold and most students probably don't go past that... and then you're only paying 15 per cent tax on money over that threshold."
Shaun, a restaurant owner who called into Hack, says people often approach him hoping for cash-in-hand employment.
"I think it's interesting this statement that it's about not knowing their rights... quite often we find it's people who know how to manipulate the system."
'Not always illegal'
Dr Dennis says you can be paid cash in hand legitimately, but that is not usually the case for young people.
"There are some grey areas there, but in a nutshell your employer is required to deduct tax from your pay if you're an employee and most people working in hospitality and retail are likely to be classified as employees," he said.
The Australian Taxation Office's senior assistant commissioner for the cash economy, Michael Hardy, agrees that businesses can use cash to play employees.
"But if you don't pay your tax and you use cash to hide what is owing in relation to either your own business or your employees, that's where we get concerned, that's where we intervene," he said.
He says the ATO has ways of tracking down both employers who are doing the wrong thing.
"We can look at all the businesses in an industry and see the ones who are doing the right thing, they all group together, and all the ones doing something different, they stick out statistically," he said.
"If we go to a supplier and we know that a business if buying enough coffee beans for 1000 coffees are day, but only apparently selling 500, we'll go and have a talk to them."
He says if people are caught avoiding their tax bill, they can be forced to pay it back, or in the worst case scenarios, prosecuted.
