The more dramatic parts of the Federal Government’s Omnibus IR bill that sought to criminalise employee underpayments and introduce penalties that operated as a multiple of the magnitude of any underpayment were removed from the legislative agenda just before the Bill was voted on.
The removal of these significant penalties however does not signal that businesses have been given a ‘winter break’ from ensuring they are paying employees and retaining records in accordance with their minimum obligations. The penalties for non-compliance with workplace laws continue to be significant for both corporations and individuals within a business.
Recently, employee wage underpayment, often referred to as ‘wage theft’, has been a hot topic in industrial relations. One only needs to look at high profile cases involving George Calombaris, Uber Eats, and even some prominent law firms to understand that wage compliance is a tricky issue – even when you have competent teams and the best of intentions.
Given the extent to which the topic has been in the media and the unsuccessful passage of changes to the existing regime, this may prompt unions, employees and the Fair Work Ombudsman to redouble their efforts in relation to identifying and then prosecuting claims of misclassification and underpayment.
Just some of the potential risks of underpaying and misclassifying employees, beyond the cost of backpay, include:
- Pecuniary (financial) penalties – which, for a corporation, is a maximum of $66,600 for each contravention or a maximum of $666,000 for each serious contravention.
- Reputational damage among public customers but also among current and prospective employees.
- An audit by the Fair Work Ombudsman and on-going compliance activities being mandated through enforceable undertakings.
Ai Group Workplace Lawyers has experienced employment law practitioners that can assist in avoiding the potential risks and penalties of underpayment and misclassification by:
- Reviewing award coverage of employees;
- Reviewing the classifications of employees;
- Conducting wage audits; and
- Checking that payroll assumptions and systems align with award requirements.
If you would like more information about the changes to the Fair Work Act 2009 (Cth) or the National Employment Standards, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.
Alternatively, if you would like advice or assistance with implementing payroll audits, award classification of employees or responding to union claims, we would be happy to assist from any of our Ai Group Workplace offices in Sydney, Newcastle, Melbourne, Wollongong, Brisbane, Adelaide or Perth, or contact Ai Group Workplace Lawyers here:
Phone 1300 55 45 81
By Andrew Tulic