The Fair Work Ombudsman has launched legal action against a Sydney accounting and financial services firm, alleging it operated an unlawful cashback scheme that stripped a migrant worker of all her earnings.
Innovative Associates Pty Ltd and its sole director and owner, Dila Ram Kharel, are accused of requiring a Nepalese national employed part-time as an assistant accountant to return money covering her entire wage, along with superannuation and tax. The woman, in her 30s and on a temporary graduate visa at the time, worked for the company between July 2019 and December 2020.
The regulator alleges the firm failed to pay the employee anything for about the first 10 weeks of her employment, before directing her to transfer funds to bank accounts in Mr Kharel’s name or under his control. It is alleged Mr Kharel then moved the money into the company’s account, which Innovative Associates used to process her wages and meet PAYG withholding and superannuation obligations, creating the appearance of compliance.
According to the Ombudsman, from October 2019 to December 2020 the worker paid a total of $32,907 into Mr Kharel’s accounts, with the company returning $27,873.50 to her as wages under the scheme. The regulator alleges that despite being entitled to the National Minimum Wage, the arrangements meant she ultimately kept nothing for the work performed.
It is further alleged the company breached record-keeping and payslip requirements, including by knowingly providing a Fair Work Inspector with false or misleading payslips, and failed to pay the worker for public holidays she was entitled to be absent from, as well as her accrued but untaken annual leave at the end of her employment.
Fair Work Ombudsman Anna Booth said the alleged conduct was serious and targeted a visa holder. “We will be alleging in court that this company implemented a cashback scheme to try to give the impression that it was complying with its legal wage obligations, when it in fact was exploiting a vulnerable migrant worker for its own gain,” Ms Booth said.
The Ombudsman’s investigation began after the worker lodged a request for assistance. In total, including all alleged contraventions linked to the cashback scheme and underpayments of wages and other entitlements, the worker was allegedly underpaid $40,164.49. Innovative Associates has since back-paid the worker in full.
The regulator alleges Mr Kharel was involved in all of the company’s contraventions. It is seeking penalties in the Federal Circuit and Family Court. For the alleged cashback contravention alone, the company faces a maximum penalty of $66,600 and Mr Kharel up to $13,320. For other alleged breaches, the company faces penalties of up to $66,600 per contravention, with Mr Kharel facing up to $13,320 per contravention.
A directions hearing is set for 18 August 2025 in Sydney.
The Ombudsman said the agency regards “cashback” arrangements as among the most blatant forms of worker exploitation and has made protecting visa holders a priority. “For more than a year’s work, we allege the worker got to keep no wages and instead had to pay even more than she received.
“Unlawful cashback schemes are one of the most blatant and appalling forms of exploitation.
“Employers need to be aware that taking action to protect potentially vulnerable workers, including visa holders, is among the Fair Work Ombudsman’s top priorities.
“All employees in Australia are entitled to receive – and keep – the minimum lawful entitlements that apply to their employment position, regardless of their visa status. Protections exist for any visas of those who call out exploitation.
“We also have no tolerance for allegedly knowingly providing our inspectors false or misleading records.
“We urge visa holders and other employees with concerns about their pay or entitlements to contact the Fair Work Ombudsman for free advice and assistance.”
In the seven financial years to June 2024, the Ombudsman filed 146 litigations involving visa holder workers and secured nearly $23 million in penalties in cases that have included visa holders. The agency also provides an anonymous report tool, with options to report in languages other than English, and information for migrant workers, including visa protections.
