Wage disputes between workers and management often make the news. In 2016, some of Australia’s most well known retail and fast-food brands were found to underpay workers. Companies owed workers more than $300 million dollars annually due to unfair agreements regarding weekend and penalty rates.
Two years ago, Fair Work staff raided 7-Eleven stores across Melbourne, Sydney and Brisbane and discovered that 60 per cent of stores were underpaying staff. While it seems 7-Eleven management did this deliberately, it is easy for employers to fall foul of legislations. Businesses need to be careful and up to date with Fair Work Australia’s new provisions under Protecting Vulnerable Workers Act 2017.
According to these provisions, ignorance of laws by staff is no longer admissible. In fact, anyone who accesses employee payroll information including payroll specialists and companies are liable if there is a breach.
This means that all staff who have access to payroll information or approvals need to stay updated on changes and inform everyone who is directly or indirectly affected by the laws.
Rights of employees under Fair Work Australia
The amendments to existing Fair Work laws came into effect from 27 October 2017. While there is extensive information on their website, these are the main things you need to be aware of when it comes to employees’ salaries and wages.
The new provisions now extend to franchisors and holding companies exerting major influence on their subsidiaries. If subsidiaries are negligent because they failed to meet the requirements below, they are in breach:
- minimum wage level – an employee’s base rate of pay for normal hours worked. From July 1, 2017, the minimum wage increased to $694.90 per week, from $17.70 to $18.29 per hour
- the National Employment Standards (NES) which comprises of 10 minimum employment entitlements that have to be given to all employees
- relevant Fair Work Australia awards which list the minimum wages and conditions that an employee is entitled to
- sham contracting happens when an employee is listed and remunerated as an independent contractor
- proper record keeping and payslips to ensure everyone is being paid in accordance with their awards
Under the Fair Work amendments, the following penalties are now in place (source: Fair Work Australia):
- increased penalties for serious contraventions of workplace laws for example false or misleading records or statements
- employers can’t ask for ‘cashback‘ from employees or prospective employees in return for something else
- increased penalties for breaches of record-keeping and pay slip obligations
- employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)
- strengthened powers to collect evidence in investigations
- new penalties for giving false or misleading information or hindering or obstructing Fair Work investigations.
Any business that breaks these laws faces a costly exercise in reversing the process, suffers damage to its reputation, loss of goodwill, and mistrust from the employees and public.
Protect your business with the right payroll software
Your business can avoid these legal problems by ensuring your payroll software includes the following when calculating pay rates:
- awards/agreement conditions under which the employee is hired
- tracking time sheets ensuring payslips are compliant with the law and everyone is paid correctly
- changing employee pay rates where needed
- allowing franchisees to see franchisor information (when allowed)
E-Payoffice payroll software has functionalities and different applications to streamline your entire payroll process including awards and agreements. Complex rosters and timesheets are no longer tricky with E-Payoffice because you can view, plan and even estimate how much your employees’ salaries and leave payments are costing the business – avoiding errors due to complexity and helping you forecast accurately.
E-Payoffice is customised to your business’s needs so you only pay for system features you need. We also train your staff on how to use the software and provide technical support, so everyone understands and knows how to use the software.
Can your current payroll software provider do all this? Request a demo of E-Payoffice for a no-obligation discussion.