Fair Work’s Annual National Minimum Wage Review is just around the corner. With the decision typically announced in June and any changes kicking in from the first full pay period after 1 July, now’s the perfect time to get ahead and make sure your business is prepared.
This is also your annual reminder to double-check how you’re paying your team. Failing to pay employees correctly—or not having clear, written employment agreements to clarify this—can lead to consequences, with fines up to $8.25 million, and in extreme cases, even criminal charges with up to 10 years’ imprisonment.
Even honest mistakes can be costly. Unintentional underpayments can lead to legal claims for up to six years of backpay and fines of up to $495,000 for businesses.
The Fair Work Act 2009 (Cth) (Act) provides not only for a company but also individuals to be able to be held liable for certain actions. Section 550 of the Act provides that “a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.” Civil remedy provisions relate to breaches of the Act that are punishable by a fine.
This provision means that anyone who, whether directly or indirectly, has been a part of or caused a contravention to occur, can be held personally liable for such a contravention. If a person is found to be personally liable, they can be fined in a personal capacity, where pecuniary penalties for individuals can range up to $19,800 for non-serious contraventions and up to $198,000 for serious contraventions. ‘Serious contraventions’ involve individuals knowingly contravening the Act.
So, while the cold is keeping us indoors, and we are anxiously awaiting the outcome of Fair Work’s minimum wage decision, it is the perfect season to:
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Check compliance including for employees on all up hourly rates, salaries and enterprise agreements
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Review employment contracts to ensure they are current and clearly outline how pay is calculated
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Audit employee hours and payroll records to make sure they align with any assumptions made when setting remuneration rates
Still not convinced? Read how one incorrect decision cost a company over $290,000 in backpay and penalties.
If you’re unsure whether you’re ticking all the boxes, we’re here to help. You can let us know now that you would like us to check your wage compliance updated after 1 July, by emailing service@focushr.com.au and we will reach out to you to get the ball rolling.