Business, Feature, Management

Managing your wage compliance

“If you think compliance is expensive, try non-compliance,” former US deputy attorney general Paul McNulty once said. JULIE LARKIN explains what Fair Work expects from practices.

Julie Larkin.

It seems that barely a week goes by that we don’t see a new allegation of wage theft reported in the media. Although Fair Work’s flavour of the month appears to be gourmet-chefs-cum-tv-celebrities, that doesn’t automatically mean everyone else is safe from the proverbial chopping block.

In 2017, Fair Work launched the National Healthcare and Social Assistance campaign, conducting a total of 696 audits across medical and healthcare services, resulting in 16 infringement notices, 12 formal cautions and one compliance notice – to an optometrist that was ordered to repay almost $6000 in backpay to its employees.

Overall, the campaign found 85% were paying their staff correctly and 86% were compliant with record keeping and payslip requirements. Just 74% of businesses were judged to be fully compliant.

So, in the face of mounting pressure, what can businesses do to protect themselves?

As it turns out, the key to protecting your business can be summarised in two words: ‘Demonstrating Intent’.

Businesses demonstrating a genuine intent to be compliant – even if they fall short of the mark – face a much easier road in both avoiding potential claims from employees and managing Fair
Work scrutiny should they find themselves under the microscope.

So how does a business effectively demonstrate their intent to be compliant?

There are three key elements involved – Records, Systems and Consultation.

Records: Just keeping detailed, orderly records goes a long way to helping establish your intent to be compliant.

A metadata analysis of Fair Work audit campaign reports over the past two years indicates somewhere around one in four businesses still fail to comply with record-keeping obligations, particularly with regards to timesheets and payslip information.

Systems: One of the biggest mistakes businesses make is working under the assumption that most discretionary expenditure should be used to grow their business through employment, marketing and product offerings.

Technology and software information systems responsible for taking, keeping and storing records are effectively the equivalent of insurance, and businesses should consider the potential cost of not having quality HR, rostering, time and attendance and payroll systems in place to help demonstrate and maintain their compliance obligations.

Consultation: Your business may employ a HR professional. If it does – or even if it does not – there are a variety of resources available that all owners and managers should be well versed in and familiar with, including:

• Industry Award documents: Bearing in mind that your employees may be covered by a variety of awards depending on the work they are performing

• Fair Work: The Fair Work website contains a wealth of information and resources to help businesses of all sizes and types to manage their compliance obligations, including a Compliance Self-Audit Checklist that is worth doing at least on an annual basis. Subscribe to email updates in order to stay abreast of any industry and legislative changes that might affect your business and its compliance obligations.

• Governing Industry Bodies/AHRI: Many of these offer free email newsletters and updates to subscribe to.

• Chambers of Business/Commerce: These are available in every state of Australia to provide advice.

• HR Consultants: If you do not employ one, there are many available who contract and undertake casual consulting work.

Being able to establish extensive consultation demonstrates a genuine intent to be compliant.

If you should happen to be the subject of a Fair Work investigation or audit, it is important to: comply with any requests made for information; correct breaches voluntarily, swiftly and completely; be co-operative and prompt during any investigation or mediation and comply with notices given or seek legal advice if you disagree with their assessment; and if proceedings are threatened; offer an Enforced Undertaking and seek legal advice to defend as appropriate and make or consider reasonable settlement offers.

As for the optometrist I mentioned earlier? The Fair Work Ombudsman issued the business with a compliance notice. The employer cooperated and rectified the underpayments under the terms of the notice. No further action was taken.

ABOUT THE AUTHOR: Julie Larkin is the National Manager at WageLoch Rostering, Time & Attendance, a solution designed for managing labour hours for your practice. Compliant award interpreter, evidential capabilities and full audit trail. Contact Julie on Email: jlarkin@wageloch.com.au Mob: 0429 212 196 or visit www.wageloch.com.au