One of the buzz words around Australian business right now is ‘wage theft’. There have been many publicised cases of wage theft. Fair Work Australia has determined that even big companies like Bunnings, Woolworths and 7 Eleven have been guilty.
It may sound like a harsh term. Many instances of ‘wage theft’ are caused by administrative errors rather than any intent to underpay staff. However, the result is the same regardless of your intent, and it can be extremely costly for businesses.
National Employment Awards Changes
Throughout February 2020, our national employment awards are being updated. Awards are reviewed regularly, however, the 2020 change sees more than just a change in the award wage rates. Here are a few of the key issues to be aware of, to ensure you’re complying with all new rules and regulations. To make sure your business is acting in accordance with the updates, contact us at MSI Taylor for your Payroll Compliance Review.
Employers must now provide staff with details of their annualised wage and the hours the wage applies to. Specifically, they must outline any additional hours that form part of their annualised salary. Each award prescribes a limit of ordinary hours and a limit of overtime hours expected as part of the salary.
This ensures employees are not paid less under an annualised salary than if they worked under an hourly rate. If an employee earns less, any shortfall must be reported on and paid back to the employee annually.
Businesses are required to accurately record the start and finish times of employees including any unpaid breaks. Staff also need to acknowledge these records in writing or electronically.
From 1 January 2020, employers must pay superannuation based on an employee’s gross annual income. This may come as a change to some employers who have been calculating super based on a reduced salary (such as salary sacrifice arrangements).
Many cases recently have found that external bookkeepers, accountants, and even labor-hire firms have been responsible for cases of wage theft. This is why it’s so important for everybody who deals with payroll to have a clear understanding of their obligations and the law.
As the owner or director of a company, you can still be held personally liable for underpayments. The excuse that you use an accountant or bookkeeper doesn’t absolve you of responsibility as the business owner.
Check Your Payroll Systems
At MSI Taylor, we analyse a lot of clients’ payroll systems, and we often come across errors. We see wages, superannuation and other entitlements being calculated incorrectly. Also, we often find the incorrect processing of RDO’s and overtime.
With Single Touch Payroll and the new award changes, we strongly recommend checking your payroll systems to ensure they comply with new laws.
To ensure your company is operating in accordance with the new regulations, we conduct a full Payroll Compliance Review. We analyse all aspects of your payroll system. This ensures all wages, super, accounting, and tax are accurately calculated according to your awards and agreements. Most importantly, we also check your payment processing systems and make sure payments are being made correctly.
If you’d like to avoid costly mistakes and protect your business, contact us at MSI Taylor today and find out how we can ensure your payroll compliance is perfect.