It seems as though 2019 was the year that serious payroll mistakes and substantial employee underpayments rose to the surface. The media showed no hesitation in naming and shaming the offending employers. For a while, it felt as though a new name was hitting the headlines every day: George Calombaris, Woolworths, Bunnings, Lush, Michael Hill Jeweller, Qantas, CBA, and even organisations like the ABC and the Red Cross.
This public shaming is not only embarrassing for the business owner personally but is also bad for business. For small businesses, in particular, the cash flow implications of having to pay an unexpected liability can also be crippling.
In this article, we have put together our top five tips for business owners to avoid underpayment and make 2020 a better year for both you and your staff.
- Ensure that you are paying your employees under the correct classification in the relevant Award or Enterprise Agreement. Write down a list of tasks that an employee will do in a typical workday and compare this to the duties set out in each Award classification.
- Do not outsource your understanding of payroll to your payroll software. Software does not always get it right, so it is important that you avoid over-reliance by ensuring that you understand the calculations behind your payroll system.
- Put a note in your diary to check for Award wage increases on 1 July each year. Also diarise the birthdays of any junior employees, which ensures that you do not overlook any age-based wage increases (and also makes you look like a great boss!)
- Be alert to the factors that can vary an employee's normal wages. These factors include work on weekends or public holidays, work beyond certain hours, responsibilities for opening or closing the business, distance traveled to the workplace, and certain types of work that attract special allowances.
- If in doubt, seek legal advice. The Fair Work Act has 960 sections and is a quarter of a million words in length, so there is nothing wrong with calling your solicitor when you need assistance.
At Kenny Spring, our fixed-fee "On Call" retainer allows business owners to pick up the phone without fear that they are being charged for every minute. If you like the sound of having a solicitor "On Call" to answer your employment law and payroll questions, please contact our office to discuss on 1800 650 656. We're here to help!
Aaron Strickland | Solicitor