Wage theft: how do I tell if I'm underpaying my staff?

Underpayment of wages has been a major talking point recently. When a recently client asked, how do I tell if I’m underpaying my staff? My answer was – check the award and your record keeping systems comply with it.

In the Australian wage system, the entitlements of workers (including wages) is set by:

  • The provisions of the relevant award or
  • An EBA (Enterprise Bargaining Agreement) or
  • An individual flexibility arrangements

With the heightened attention on wage compliance, it is essential that small businesses are on top of their obligations to their employees.

For most small businesses, employees will be simply covered by an award. Sometimes a small business will have some employees on individual flexibility arrangements

So how can you make sure your small business is fulfilling its obligations to employees? At OFRM we suggest that now is time to review your current arrangements and set up processes for compliance with future new employees

  • Review your current employment records to make sure it is clear on what basis each employee is employed and that both you and they are aware of the Award that covers them
  • Review each employee’s salary and conditions to make sure it complies with the relevant award
  • Make sure you have an employees' record keeping system that collects and retains the information to prove compliance with the Award
  • If you have staff on individual contracts, check that the contract stands alone and isn’t also subject to the award
  • Reviewing that your employment contract is ready to roll for your next hire

The consequences of non-compliance can be devastating - legal action, large back payments, reputational damage and large fines or other penalties.

Awards are large and cumbersome. At OFRM we have done a lot of work recently working with clients to assist them making sure all is in order regarding wage compliance. That might be a project encompassing all of the above. Maybe it is just some initial advice guiding you in the right direction. Maybe it is a plan of work over time to review all of your wage and conditions touch points.

For assistance with wage compliance please call Siobhan Liston on 03 5445 1067 or Lachlan Edwards on 0427 916 442.

Business LawSiobhan ListonO'Farrell Robertson McMahonwages, wage theft, award, employment, casual employees