In April 2018, Fairwork Australia announced that it had begun the process of auditing over 1000 businesses across the retail, hospitality and manufacturing sectors in an effort to target employer compliance in meeting their “basic” obligations. (https://www.fairwork.gov.au/about-us/news-and-media-releases/2018-media-releases/april-2018/20180411-workplace-basics-campaign-mr)
This is not a surprising move, considering the steady number of businesses being caught out through various means and methods – such as previous similar campaigns, as well as investigations triggered by employee complaints lodged directly with Fairwork itself. The perception that there is an epidemic of businesses shortchanging their employees has reached the level where some factions are now pushing to criminalise deliberate or grossly negligent levels of employee wage theft. (http://www.nswlabor.org.au/a_new_law_to_criminalise_wage_theft)
The cautionary tale here, however, is not solely reserved for businesses who intentionally seek to hide, disguise or fraudulently account for their employee wages, as Fairwork Australia spokesperson Kristen Hannah states – “It is imperative that businesses make themselves aware of their obligations, as the potential penalties for such contraventions have never been higher,” In other words: ignorance of employment regulations is not considered a reasonable excuse for non-compliance.
So, considering the complexity of modern award and employment regulations, combined with increasing pressure and scrutiny on time-poor business owners to ensure they ‘get it right’ – what are some steps owners can take to protect their business, their employees, and themselves?
- Get Educated and Seek Advice – A good place to start is with Fairwork itself. The website contains a number of resources for business owners, including full Award documents, general fact sheets, and phone numbers you can call to ask questions and seek clarification. Other useful resources are Business Advisory organisations (eg Business Enterprise Centres, Business SA/Business Tasmania/Small Business Victoria etc), as well as your industry governing bodies (eg The Pharmacy Guild of Australia, the Retail Trade Association, Australian Hotels Association, etc).
“Changes made by the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017… doubled the maximum penalty for failing to keep employee records or issue pay slips to $63,000 for a company and $12,600 for an individual, and tripled the maximum penalty for knowingly making or keeping false or misleading employee records to $12,600 for an individual” (https://www.fairwork.gov.au/about-us/news-and-media-releases/2018-media-releases/april-2018/20180411-workplace-basics-campaign-mr)
- Invest in Technology – One of the biggest traps for players is record-keeping. Even if you are correctly paying your employees, being able to prove it when you need to is another matter entirely. There are a number of easy-to-use, affordable Rostering, Time and Attendance software solutions available in the market to ensure that employers are meeting their record-keeping requirements, including rostered hours, worked hours (clock in/clock out), timesheets and payslips. Most of these software solutions will integrate into payroll and bookkeeping software; this avoids excessive manual entry and double handling, making it significantly less onerous on employers to meet these stringent record keeping requirements.
- Develop Robust Processes – Checklists and Routines. One of the best ways to ensure that you effectively comply with your obligations as an employer is to develop checklists and routines around managing employee onboarding and remuneration. Once you have a list of the requirements to hire and employ a new person, create a checklist of those items and make sure you follow it every time. Likewise, develop a checklist for weekly or fortnightly rostering, timesheet and payroll tasks, and ensure that they are done the same way, the same time, every week. Once you develop your own routines around these processes, it becomes much more difficult to miss tasks and steps in ensuring you are Fairwork compliant. Samples and resources for business are now available from Fairwork’s new Small Business Showcase.
- Outsource Where Possible – Depending on the size and the resources of the business owner, it is always a great option to outsource tasks like payroll to bookkeepers, agents or payroll bureaus. Often industry-specific governing bodies will frequently offer payroll management services. Aside from the time-saving factor, these specialists also have a wealth of experience, and can assist you with being compliant in terms of pay rates, penalties, record keeping and pay slips, and accessing the right resources along the way.
In summary, the employment environment has never been as complex to navigate – and as vital to get right – as it is in the current climate. While wages represent a significant cost to the average Australian business, the cost of non-compliance – whether by mistake or by design – is significantly higher. And it is absolutely crucial for business owners to ensure that they are adequately equipped to meet this risk head on.