As previously written, the state and national minimum wage increased as of 1 July 2019. Most employers would have by now undertaken a review of all their wages and implemented any necessary changes to employment contracts and your payroll.
However, have you also reviewed which Awards or enterprise agreements apply to your employees? If not, you might still be in breach of your obligations as an employer. Even if your employees are being paid at or above minimum wage, there are some common Awards that may include a higher figure for some or all of your employees. These Awards include:
- Clerks – Private Sector Award 2010;
- General Retail Industry Award 2010;
- Restaurant industry Award 2010;
- Hospitality Industry (General) Award 2010;
- 2010 Building and Construction General On-site Award 2010.
A full list of the relevant Awards; and agreements can be found on the Fair Work Commission and the WAIRC websites. Each Award and agreement sets out the classification and rates that apply to different employees. Different rates may apply to employees who work weekends, nights and/or public holidays.
What are your first steps?
Once you're sure you've correctly classified your employees, and have set up appropriate employment contracts and payroll processes, it is also important to ensure that you maintain ongoing records of payments made and that employees are provided with payslips reflecting those amounts.
What happens if I do nothing?
The Fair Work Ombudsman has this week successfully prosecuted an employer in Queensland for underpayment of nine employees, including for breaches of record-keeping obligations and failure to provide adequate payslips. The amount of the underpayments (including underpayment of superannuation) totalled less than $30,000. The penalties imposed on the company AND its directors totalled $125,700 (with nearly $20,000 of that amount payable by the directors).
The maximum penalties for breaches of the Award or the Fair Work Act related to underpayment of employees are $63,000 for companies and $12,600 for individuals. You will likely also be ordered to repay any underpaid amounts, including superannuation contributions. You can also be issued with infringements notices for failing to provide payslips or other record-keeping breaches. These are on-the-spot fines issued by FWO inspectors and can be a maximum of $1,260 per contravention for an individual or $6,300 per contravention for a company.
Where to from now?
We recommend you carefully review all of your employees and whether an Award or agreement applies to them (or to your business). If you're unsure about which classification or rate applies, we can provide you with guidance, whether you require advice as to classifications and wages only or as part of an overall review of your employment contracts.
Even if you're confident that you're paying your employees at the correct rates, remember that it is also important to provide payslips and ensure records are kept of these payments. We can assist with setting up processes and templates to protect your business, directors and management staff.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.