Wage theft is bad for business. Are you guilty?

Wednesday March 18, 2020

Wage underpayment has made the news again, this time with grocery giant, Coles, coming clean about wage underpayments totalling $20 million.

Coles joins a long list of companies guilty of wage theft, which includes other greats such as Woolworths, Flight Centre and even the ABC.

Federal Attorney-General Christian Porter believes there is a clear need to update legislation around wage underpayments. The new legislation seeks to criminalise the worst cases of worker underpayment and exploitation. Options for the new legislation will include laws around visa types and potentially forcing companies to publicly disclose and publish their indiscretions.

Mr Porter states, if corporate Australia hasn’t got the message to get their house in order yet, “they’re going to be absolutely and utterly compelled to in the future by the most vigorous, robust and complete set of laws around wage underpayment that Australia’s ever seen.”

Even without these legislative changes, companies already face enormous fines and legal action for lack of payroll compliance.

Keeping on-top of New Award Changes
After the completion of its four-yearly review into modern awards, the Fair Work Commission has implemented some crucial changes to ensure all employees covered by Awards are compensated correctly for their work.

Failure to implement these changes to your contracts and payroll processes for award-covered employees will be a breach under the Fair Work Act and can lead to sizable fines.

With so many wage changes happening, employers need to be extra vigilant with their payroll.

Not just bad for business
Wage theft from employees is not only bad for business, it’s also bad for employee morale. Underpaid workers could be experiencing severe financial stress, which doesn’t just impact employees at home. It can stop a person from being able to work effectively too. If left unsupported, they can experience all sorts of problems, including an inability to focus, frequent absences from work or worse.

Research into Financial Stress in the Australian Workplace, completed in 2018, found that 31% of employees worry about their finances while up to 8% were kept awake by their financial worries.

There is some good news. By paying employees properly and including financial wellbeing in your health and wellness programs, you could help employees struggling with money worries.

How to Stay Under the Radar
To avoid the risk of investigation and possible prosecution by the Fair Work Ombudsmen, you need to review your contracts and payroll processes against the relevant awards and legislation. You’ll also need to make the appropriate changes if you find areas where you are non-compliant.

Staying abreast of the complexities of payroll can be challenging, especially for small businesses. Help is at hand. Our team are here to help ensure you get it right, the first time. We provide local, personal and expert advice and support to help you navigate the complexities of payroll and awards.

By outsourcing your HR with us, you get the same advantages that large businesses enjoy, at a fraction of the cost. Call us today to help you ensure your contracts and payroll meet the changing legislative requirements.

Preventing People Problems

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