Look Out! Wage Theft And Underpayments On Fair Work Ombudsman’s Agenda

Modern Awards have always allowed some flexibility when it comes to paying staff. Typically, that would mean paying staff above their Award to cover penalties and allowances. But with the continuing, high-profile wage theft cases hitting the news, the Fair Work Ombudsman is taking a very protective view of workers’ entitlements.

Now, and we mean right NOW, you need to get your payroll records in order so you can demonstrate you are paying your staff at their appropriate Modern Award rate – as a minimum!

Here’s A Summary Of What You Need To Do

  • Provide each staff member with specific information on how their annualised salary is calculated. This includes the exact amount attributed to all Award entitlements. Here’s an example to get you started:

38 ordinary hours at $A less tax

B hours of overtime per week at $C less tax

$D as car allowance per week less tax

And so on until each allowance, loading and/or penalty has been calculated.

  • Perform an annual reconciliation to compare the salary paid with the amount that would have been paid according to the Award. The reconciliation needs to include all penalties, overtime and loadings. If a shortfall is revealed, you will be required to pay it within a stipulated timeframe.
  • Implement timesheets or ‘clock-on/clock-off” systems to track the hours worked by employees – including breaks. If you haven’t had this type of record-keeping system in the past, there could be some resistance (or suspicion) by workers to adhere to this new regime. So be prepared to explain why it is a benefit to them.
  • Each pay cycle, employees will be required to acknowledge (in writing) that their record of hours worked is correct.
  • Specify the ‘outer limit’ of ordinary hours an employee may be asked to work each pay or roster cycle. ‘Outer limit’ is the amount of overtime and penalty hours and annual salary covers.
  • Upon termination or resignation, employers must reconcile salaries paid and hours worked (as above) and pay any shortfall.
  • Letters need to be sent to employees explaining:

The above changes and why they are being implemented

How their annualised salary is calculated 

The importance of keeping accurate timesheets

  • Review current policies and procedures to ensure:

They accurately reflect and explain the new salary calculations and timekeeping procedures

Specify when ordinary hours finish and overtime is paid – including your overtime approval process

Clearly state the implications of timesheet fraud 

Update employment contract templates for new employees so they reflect these changes

Don’t Bury Your Head In The Sand!

We understand you may be feeling overwhelmed by the thought of implementing all these new requirements. But you don’t have to do all this by yourself. 

The team at End2End Business Solutions handle all these issues for their clients every day. They’ll even help you inform staff about the importance and benefits of accurately recording their working hours.

So instead of burying your head in the sand, make a phone call to End2End on 02 8977 4002. We’ll quickly have everything sorted for you.