Are You Being Underpaid as an Executive?

By Alan J. McDonald

As an executive, your role is pivotal to the success of your organisation, often involving long hours, high levels of responsibility, and significant expertise. However, it is not uncommon for executives to feel they are being underpaid for the contributions they make. If this resonates with you, understanding your rights and avenues for recourse is essential.

Am I Being Paid Fairly?

As an executive, your remuneration is typically governed by the terms of your employment contract, which outlines key elements such as salary, bonuses, and other benefits. However, it’s important to note that the Fair Work Act 2009 (Cth) does not set minimum payment requirements for employees. Depending on your role, you may also be covered by a Modern Award or Enterprise Bargaining Agreement, which could provide additional entitlements.

Many Australians are aware of the ongoing wage theft scandals that have impacted both employers and employees for many years. In 2022, VanEck, one of the world’s largest asset managers underpaid an Australian executive by over $100,000 over a period of six years.

Numerous prominent organisations have faced significant financial and reputational consequences for underpaying their staff. In February 2024, the Fair Work Ombudsman secured a record $10.34 million in penalties against the Commonwealth Bank of Australia (CBA) and its subsidiary CommSec for underpaying staff a total of over $16 million. Additionally, as of 26 June 2024 University wage theft is on track to exceed $382 million nationally as per the National Tertiary Education Union (NTEU).

If you believe you are underpaid, it is essential to address the issue promptly and strategically. This often begins with negotiating directly with your employer, using evidence such as industry benchmarks, your achievements, and your contract terms to support your case. While effective negotiation can often lead to a resolution that aligns your remuneration with market standards, the inherent power imbalance between employers and employees can make this process challenging.

At McDonald Murholme, our experienced employment lawyers can guide you through this process, offering tailored advice and representation to ensure your value is recognised. Whether it’s preparing for negotiations or exploring legal options, we’re here to help secure the outcome you deserve.

Am I Being Discriminated Against?

The gender pay disparity continues to be a significant issue in Australia, particularly among senior leadership roles. Recent data from the Workplace Gender Equality Agency (February 2024) reveals that female CEOs earn, on average, $170,000 less than their male counterparts, equating to a 25% pay gap.

Including CEOs and Heads of Businesses in the data increased the overall gender pay gap to 21.8% compared to the previous year at 21.7%. Additionally, only one third of employers reported a neutral gender pay gap, defined as being within the range of -5% to +5%.

This disparity even extends to the legal profession, where the 2024 Australian Legal Salary Survey by the College of Law revealed a staggering 35% gender pay gap at the Principal level. Furthermore, this is demonstrated through law firms such as Maurice Blackburn Lawyers and Slater and Gordon which have a 30.7% and 31.3% difference in median total numeration and a 18.9% and 22.4% difference in average total remuneration, respectively.

The Fair Work Act 2009 (Cth) safeguards against gender-based pay disparities, mandating equal remuneration for men and women performing comparable roles. At McDonald Murholme, we are committed to standing up for fairness and equality in the workplace. If you believe you are being paid less due to your gender or facing any form of workplace discrimination, our experienced employment lawyers can provide the guidance and representation you need.