Action Points
Employers should review their payroll to ensure:
- The correct award is being applied to staff;
- The correct classification within the award is being applied to staff;
- The minimum pay rates are being met;
- All entitlements and being paid and provided; and
- Your payroll software is setup to handle this.
Key Links
We highly recommend you have a read of:
WHAT IS "WAGE THEFT"
“Wage Theft” is the catchy term given when businesses underpay their staff – be it a lower hourly rate, not paying loadings, not providing leave benefits, and so on.
WHAT IS CHANGING
The “rules” around paying staff isn’t changing, just the penalties for doing the wrong thing are.
Underpaying staff has always been wrong and has been (and still is) dealt with by Fair Work – except Fair Work can only lay civil charges, these new laws can lay criminal charges. One way we’ve seen the difference explained is that civil law deals with disputes between parties, criminal law is there to protect the community.
The Victorian Government has decided that we needed additional laws to deal with wage theft because the existing ones that effectively are dealing with a dispute between employee and employer don’t adequately cover circumstances where the employer is deliberately doing the wrong thing (i.e. stealing from the staff member by deliberately underpaying them).
The focus in on businesses that deliberately underpay staff, and those businesses owners are now potentially up for 10 years behind bars.
The Victorian Government has an information page for businesses at https://www.vic.gov.au/wage-theft-employer-information.
QUESTIONS ON VALIDITY
Smarter people than us have questioned whether these laws are constitutional given that there are already Federal Laws around wage theft (i.e. the Fair Work Act already governs this area, so any Victorian Laws may be invalid). We can’t comment on whether this is true or not, but will say that if you do the right thing, it won’t matter.
WHAT DO I NEED TO DO?
Short answer: Pay your staff as required by Fair Work and the various awards.
While the rules are designed to catch those that deliberately underpay staff, who’s to say that businesses that accidentally do the wrong thing won’t get caught up in it. We suggest that every business treats underpaying staff as if their freedom depended on it (if they weren’t already).
All employers should review their payroll to ensure:
- The correct award is being applied to staff;
- The correct classification within the award is being applied to staff;
- The minimum pay rates are being met; and
- All entitlements and being paid and provided.
We would recommend getting a review done by a HR expert to ensure you are complying. We recommend The HR People.
If you want to look after it yourself, then the following process might help:
- Check to see if your staff are covered by an award (https://www.fairwork.gov.au/awards-and-agreements/awards). Most staff are covered by an award, and keep in mind there is a Professional Employees Award, a Clerks Award, and a Miscellaneous Award that might catch employees that you may think are award free or fit under a different award. A call to FairWork to ask them their thoughts may be an idea.
- Review the award(s) that apply to your business and put your staff into their various classifications.
- Review your payroll software. Some payroll software has awards in-built into it which is great for ensuring that you comply with all of the requirements. Otherwise you may need to setup additional categories to cater for loadings, allowances, etc and apply those to the employee pay templates.
- Check your systems around how you record days and hours worked. Most awards have penalty rates for working outside “ordinary” hours and doing overtime, so you want to ensure you are capturing all of those hours that penalty rates apply to.
I NEED HELP
If you are looking for help interpreting awards and figuring out what rates and loadings apply to your staff, we would recommend The HR People. Awards are complicated to say the least and chatting to people who specialise in it is the best advice we can give you.
If you want help getting your payroll software setup, or some systems in place, then we can absolutely help you with that.
