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Paying Staff Correctly and Keeping Up with Changes

This month’s Reader’s Request came from a client who is concerned about ensuring that they are paying staff correctly and keeping up with increases when they occur.

I was delighted to get this question as many employers pay the bare minimum, sometimes not even the award rate, and end up in strife not only with the employee they should be paying but also the Fair Work Ombudsman.

It is often thought that as long as the employer pays the award rate that they are in compliance, however, this is not always the case. Unfortunately, the Fair Work Ombudsman deals with breaches with penalty rates, overtime, incorrect classifications, and not meeting the requirements of providing payslips on a regular basis.

In recent years companies even as big as McDonalds, Super AMart, No. 1 Riverside Quay Pty Ltd (a retail company who employees 400 workers), have all fallen to noncompliance in regards to payment of wages. Each breach can be worth $6,600 and up to $33,000 for a corporate employer and others, such as managers, can also be penalised.

In  January 2012 there were several workers in the Riverina area that were back-paid a total of $71,400 following intervention by the Fair Work Ombudsman, due to 13 employers breaching workplace laws in regards to incorrect payment of wages. One individual, who was a salesman from Wagga, had been underpaid by $38,200 over a period of 20 years.

Therefore, it pays to get it right and here are our tips to help you keep on top of it:

  •  Know and document the awards and classifications that you employ under and what penalty rates that may be applied, this includes meal breaks and leave entitlements. For modern awards, this information can be found here: http://www.fairwork.gov.au/awards/pages/default.aspx.
  • Utilise the tools on the Fair Work Ombudsman website to find the right pay and to check pay rates using the calculators such as PayCheck Plus and Pay Rates Calculator.
  • Subscribe to the pay rate updates for the awards that apply to your company, for modern awards you can subscribe here. Alternatively, if you are a financial member of industry or business associations, such as NSW Business Chamber and other industry associations (retail, hairdressers, etc.), they will often send out wages updates too.