Payroll errors are making major headlines and casting some of Australia’s largest companies in an unfavourable light. Inspectors discovered 72% of the 243 businesses recently audited by the Fair Work Ombudsman have been in breach of workplace laws. The majority of the offenders are in the hospitality and retail sectors.
The most common breaches involved:
The underpayment of base hourly rates
Skipped meal breaks
Inadequate or non-existent employment records and pay slips
Non-payment of overtime
Incorrectly classified workers
“The modern award system is complex and the margin for error by employers is very high,” said former Fair Work Ombudsman Natalie James to the Australian Financial Review. The Retail Industry award alone has 100 different pay rates.
Guaranteeing workplace law compliance and translating that into a perfect payroll can be challenging for a business of any size. With audits and crackdowns continuing to sweep through all business sectors, managers and executives should take the time to do an internal systems review to ensure timekeeping, payroll and labour management practices are compliant.
Don’t put your organisation at risk by breaching labour laws. Tick these items off your compliance checklist.
Standardise the grey areas - Sometimes an employee’s tasks fall outside of their core responsibilities and might not look like “work”. Completing video trainings, attending staff meetings and travel between sites are just a handful of the activities that can blur the line of what is considered working time. Check with current legislation, then standardise what is and is not considered time worked and incorporate this standardisation across all locations and employees.
Automate high risk processes - Running an automated payroll is a great start, but it’s only one slice of the pie. Using an end-to-end solution to automate other back-office processes, like scheduling and leave management drastically reduces risk and complies with Work Health and Safety regulations. For example, automating scheduling will factor in compliance risks such as meal breaks, skills and certifications, and shift length.
Make it a habit to regularly check that your policies and rules are applied consistently, fairly and accurately.
Take swift action to fix issues - If you do come across an error, even a minor error, during your internal systems review, immediate corrective action should be taken. Promptly communicate with key stakeholders, including upper management, shareholders and the affected employees on how the business will resolve the issue.
Tap into resources - Get familiar with the resources available to help businesses stay ahead of changing regulations and new requirements. There’s plenty of online resources like the Fair Work Ombudsman, Australia Payroll Association, and the Department of Jobs dedicated to workplace rights and laws.
Stay audit-ready - Introduce proactive compliance to your business by refreshing employment contracts, host training sessions for managers, and engage a third-party to interpret pay awards, review processes and make recommendations specific to your business.
Compliance with the ever-changing workplace laws is not a set-and-forget. It’s an ongoing exercise that most businesses struggle to keep up with. If you haven’t already made the move to modern workforce management and payroll technology, your business could be at risk for non-compliance (and negative press coverage). Pairing automation with a close-up look of your business’ processes will drastically reduce risk and errors, while delivering agility and speed to back-office tasks.
Are you at risk for non-compliance?
Contact us today to speak about best practices and learn
how other businesses are safeguarding themselves against violations.