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Is your café, restaurant or takeaway on the ATO's radar

Is Your Café, Restaurant or Takeaway on the ATO’s Radar? What Food Businesses Must Know

Is your café, restaurant or takeaway on the ATO’s radar?

If you run a food business, a recent joint operation by two of Australia’s most powerful regulators should put you on high alert and prompt an immediate review of how you manage your obligations.

What happened?

Fast food outlets, restaurants and cafés on the Gold Coast recently received surprise visits from the Fair Work Ombudsman (FWO) and the Australian Taxation Office (ATO).

Operation Crimson involved inspections of around 25 eateries in Nerang and surrounding suburbs. The focus? Ensuring businesses are:

  • Paying employees correctly
  • Complying with record keeping requirements
  • Meeting tax and superannuation obligations

These targeted inspections were triggered by:

  • Anonymous employee reports
  • A history of non-compliance
  • Employment of vulnerable workers (such as visa holders)

For the FWO, this forms part of its national Food Precincts Program, targeting “cheap eats” areas known for high compliance risks.

Why this matters for food businesses

The sector’s compliance track record is concerning:

  • Over $215,700 in wages was recovered for nearly 450 underpaid workers after audits of 50 Gold Coast eateries in 2020
  • 88% of businesses audited were non-compliant
  • More than $16 million in penalties were ordered nationally in 2024–2025

Notably, the largest ever penalty of $15.3 million was issued against former operators of Sushi Bay for exploiting vulnerable migrant workers.

The message is clear: regulators are not just monitoring, they are actively enforcing.

What’s on the ATO and FWO radar?

Food businesses employing young workers should pay close attention to two high risk areas:

  1. Junior pay rates

Most awards include age-based pay rates for employees under 21.

Under the Fast Food Award:

  • Under 16: as low as 40% of adult rate
  • Age 20: up to 90% of adult rate

⚠️ Important:
If a junior employee serves alcohol, they must be paid the full adult rate, regardless of age.

 

  1. Superannuation obligations

You must pay superannuation for employees under 18 if they:

  • Work more than 30 hours in a week

This rule:

  • Applies to actual hours worked each week
  • Cannot be averaged across pay periods

👉 A single busy week can trigger a super obligation even if other weeks do not.

Upcoming change: Payday super

From 1 July 2026, superannuation must be paid within 7 business days of payday.

This significantly increases compliance pressure and requires tighter payroll processes.

For more information, see our news article about payday super.

What should you do now?

If you operate a café, restaurant or takeaway, ensure you:

✔ Pay correct award wages (including junior rates)
✔ Track weekly hours for employees under 18
✔ Meet all superannuation obligations
✔ Maintain accurate records (timesheets, rosters, payslips)
✔ Correctly classify employees under the relevant award

You can use the Fair Work Ombudsman’s Pay and Conditions Tool to check minimum pay rates.

Get Professional Advice

Employment obligations in the food sector are complex and costly if you get them wrong.

Seek advice and assistance from your  professional advisor to review your:

  • Payroll systems
  • Record keeping practices
  • Superannuation compliance

before a regulator reviews them for you.

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For expert tax legal advice and assistance in dealing with your tax situation, contact Mathews Tax Lawyers on 1800 685 829 or submit your query via our Online Enquiry form.

Disclaimer: The information on this page is not legal advice, is for general information purposes only, and is not specific to any person or situation. There are many factors that may affect your circumstances. You should seek professional advice from a suitably qualified and licensed advisor before making any decisions.

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