26 September 2023

Time theft: Costing Australians $93 billion a year

Start the conversation

Michael Janda* says paying people for the hours they actually work could help fix the cost-of-living crisis.

In the debate about how to lift workers’ pay packets to more closely match their surging cost of living, perhaps serious consideration should be given to simply paying people for all the hours they actually work.

According to the latest research by The Australia Institute (TAI), that alone would net workers an extra $93 billion a year, or about $8,000 for the average worker.

That’s because the typical worker is doing 4.3 hours of work a week beyond what they’re paid for.

It’s worse for full-time employees, who donate almost a full hour a day, or more than six weeks a year, to their employers.

In all, Australian workers are estimated to gift 2.5 billion unpaid hours to their bosses.

“Our research shows unpaid overtime is a systemic, multi-billion-dollar problem which robs Australian workers of time and money,” said Eliza Littleton, report author and research economist at the Australia Institute.

“This is time theft.

“Unpaid overtime harms our quality of life and reduces our time with family, friends and those we care for.”

These figures come from an annual survey conducted for TAI between September 6 and 9, which surveyed around 1,410 adults, of whom 876 were employed.

It is a statistically meaningful sample size, and the survey results are also backed by a litany of recent Fair Work actions against employers found to be underpaying their staff.

Let’s start close to home at the ABC, which found it had underpaid hundreds of staff over a long period of time, many of them due to long working hours not fully compensated by “buyout” payments intended to cover overtime and shift penalties.

It’s not the only media company recently found to have underpaid staff for the hours they worked.

It was well known among academics, particularly casual tutors and lecturers, that universities have been underpaying them for years, before ABC News lifted the lid on the widespread practice, with several institutions forced into back-paying staff millions of dollars.

Qantas, Coles, Wesfarmers, Woolworths, CBA, Westpac, NAB, 7-Eleven and Super Retail Group are some of the major corporate names who have been caught up in underpayment scandals.

That is not to mention many other smaller companies that have been busted by Fair Work, and, if the Australia Institute’s survey is even close to representative, countless other firms, big and small, that are continuing to get away with underpayments.

Young people provide more free labour

For a typical full-time, 38-hour worker doing 4.9 hours of unpaid work a week, being paid for that work at normal rates of pay, not higher overtime rates, would result in a nearly 13 per cent pay increase.

That would more than compensate for the 7.3 per cent jump in consumer prices over the past year.

Some groups within the workforce fare worse than others.

Men do a lot more unpaid overtime than women — 5.3 versus 3.3 hours — probably because more are employed full-time and because many women have to do so much unpaid housework and caring tasks that they simply don’t have time to work for free for their employer.

Young people are also on the receiving end when it comes to doing extra hours for no immediate reward.

Those aged 18-39 do about five-and-a-quarter hours of unpaid hours a week, which drops dramatically to 3.8 hours for those in their 40s and less than 3 hours for those over 50.

While the sample size for age groups isn’t huge, the gap between overtime figures for young and old is so large is demonstrates a clear statistical divergence.

Workplace giving … and taking

That’s not to say The Australia Institute’s data is perfect, even though the survey was conducted by a major research firm.

The survey isn’t massive and was conducted online, which can bring some biases to who responds.

Working hours are self-reported, and the tendency might be to overestimate how many hours are done rather than underestimate.

The survey also didn’t ask respondents how much time they spent doing personal “life admin” at work — you know, some online banking, paying a bill, making appointments, checking non-work emails.

How many of us have never done any of that during work hours?

What about chats with colleagues at the water cooler? Do they offset, or even cause, some of the extra hours people work?

Although this might be balanced by all the little work tasks — checking email in the evening or weekends, taking the odd out-of-hours work call, prepping for a big work meeting — that many people now do at home outside their standard hours without a second thought.

Then there’s the issue of “reasonable overtime”, which is baked in to most workplace agreements and contracts for this very reason, that few of us now work jobs where it’s practical or desirable to clock-in and clock-out not only at the start and end of the day, but for every break in-between.

But, under no legal definition does reasonable overtime add up to hours a week, every week.

In the end, it’s an issue of give and take between staff and their employers.

The good news for workers is that the “take” seems to have eased back to more normal levels from a pandemic peak in 2021, when the average employee reported doing 6.9 hours a week of unpaid work.

The bad news is that unpaid overtime shows no sign of going away.

The survey shows seven out of 10 workers do overtime, with almost half of those saying they did it “often”.

The most common reasons were having too much work (36 per cent), staff shortages (28 per cent), less interruptions outside normal hours (26 per cent) and manager expectations (23 per cent).

More than a quarter of the workers surveyed said overtime interfered with their personal life and relationships, with around a third saying it left them exhausted and/or stressed.

“The prevalence of overtime suggests that ‘availability creep’ has eroded the boundaries between work and life,” observed Ms Littleton.

“Workplace laws could be updated, including creating a ‘right to disconnect’ as recommended by the Senate Select Committee into Work and Care, and as exists for employees of Victoria Police.”

The right to disconnect has also just been won by teachers in Queensland.

And if there was ever a time for employees to refuse to work for free, it’s surely when unemployment is around a 50-year low and there’s a basically a job vacancy for every unemployed person.

*Michael Janda has been the ABC’s Online Business Reporter since 2009.

This article first appeared at abc.net.au

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.