Wage Theft
As many would be aware, 1 January 2025 saw significant changes to Australia’s wage theft laws. From this date, the intentional underpayment of wages or entitlements could be a criminal offence.
The intentionality is an interesting point which we will no doubt see tested in the coming months and years. However, considering preceding cases it does seem that ignorance will not be bliss. Wilfully or negligently allowing an underpayment to occur or even suspecting one may have occurred and not taking action, could be enough to attract criminal charges.
Considering the burden that increased compliance challenges can place on small businesses, the Fair Work Ombudsman (FWO) has released a helpful Voluntary Small Business Compliance Code and a guide to paying employees correctly. This Code targets businesses with less than 15 employees (total people, not Full Time Equivalent) however, the guide’s steps are widely applicable, particularly:
- Check the correct pay rates and entitlements – ensuring that your staff are being paid under the correct award or EBA, are appropriately classified under it, and that all relevant entitlements are applied.
Be mindful as well, when an employee begins a new position or roster, that these changes are reviewed to ensure that any changes to classification and entitlements are picked up. - Follow payslip and record-keeping obligations – payslips should be provided within one working day of pay, include all required information, and the records be kept in line with Fair Work requirements.
It is crucial for businesses to show that they are taking genuine steps to pay people correctly in the first instance, however the FWO have made a number of provisions to encourage businesses to self-report instances of underpayments that could decrease their risk exposure.
Some key things that businesses of any size can do to minimise their risk are:
- Be aware of your obligations - keep up to date with legislative changes and ensure that your business is correctly set up to meet regulatory requirements.
o A good way to do this is to sign up to the Fair Work Ombudsman’s email updates. - Implement a reliable payroll and record-keeping system – consider implementing a purpose-built HRIS or payroll system to help.
- Conduct regular audits - particularly in high risk areas (shift work, manual/claim based processes etc.).
Award and EBA interpretation can be an overwhelming and detail-oriented task, as can a payroll audit. An external compliance audit can assure you that you are on the right track, help catch any mistakes early or identify the scope of any issues. It also shows regulators that you’re acting in good faith and actively taking steps to do the right thing – a huge point when it comes to avoiding a criminal offence.
If you are like many small business owners, and don’t have a dedicated HR or legal team keeping track of every award change or legislative update, consider reaching out to one of our expert advisors. We can offer tailored audits designed specifically for your small to medium business. We can support you to:
- review your current payroll setup;
- review your employment contracts;
- provide expert advice regarding award and EBA interpretation;
- identify any compliance risks;
- support you to implement corrective actions; and
- identify a clear preventative action plan moving forward.
We also have a specialist HRIS implementation team, who can help identify the best system for you, and take the stress out of the adoption process. If you believe that your business could benefit from a compliance audit, HRIS implementation or review, please reach out to our friendly team, we lead our work with curiosity and passion to understand and fulfil your specific needs.
Please contact (07) 3108 9768 or info@nellershr.com.au to find out more.
