Every day we hear in the news a company being fined for underpayments to workers. There has even been an ammendment to the Fair Work Act for the protection of vulnerable workers.
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Why do you think this is happening? Sure, there are a very small amount of people who intentionally do this to save money, however, I think the main problem is that we have a complex and tricky industrial relations landscape in Australia and small business particularly find it hard to navigate. As small and medium sized business owners we are trying to focus on running our business the best we can, and to have this added complexity makes it difficult.
In Australia there are 122 Modern Awards, and Fair Work says this covers most workers these Awards are either industry or occupation based. Your business can have more than one award covering it.
Modern Awards outline employee entitlements such as - working hours, rosters, allowances, penalty rates, overtime and breaks. These instruments are your go to if you have a question.
On the Fair Work site litigation page in the last 6 months proceedings have been bought against business for underpayments, record keeping, pay slips. The Penalties have ranged from $10,000 to $660,000.
3 ways to check you are not underpaying, keeping the right records and having the correct information on payslips.
1. Pay
The best way to check to see if you are paying your employees correctly is jump onto the pay calculator and put in your information, this tool will enable you print out all relevant pay information for that Award. Note: in July each year Fair Work review wages and this come into effect on this date.
2. Record Keeping
Record keeping covers HR and Payroll. Under HR records you would need to keep information such as
- General Information (about your employee)
- Individual flexibility agreements (if applicable)
- Termination or transfer of business information
- Guarantee of annual earnings.
Payroll information would include:
- Pay records
- Hours of work
- Superannuation
3. Payslips
These must be issued within 1 day of the pay date and can be in either electronic or hard copy. Information contained on these slips are:
- employer's name and ABN
- the employee's name
- the date of payment and pay period
- the gross and net amount of payment
- any loading's, monetary allowances, bonuses, incentive-based payments, penalty rates, or other separately identifiable entitlement paid.
If you need any help navigating through this maze and establishing the correct Awards for your business, HR On Call can assist.
