Woolworths is the latest in a string of companies, including Qantas, ABC, Wesfarmers, Michael Hill Jewellers, SuperCheap Auto, and even Maurice Blackburn (an employment law firm) that have self-admitted to underpaying staff.
$300 million dollars has been identified in the recent Woolworths scandal dating back to errors made since 2010.
Paying your employees their correct legal entitlements is not only the law; it is imperative to avoid future backpay claims, and more importantly, to maintain a positive relationship with your employees based on mutual trust.
Small to Medium Business beware!
Despite most employers’ best efforts, navigating the world of employee entitlements is confusing and underpayments can be made.
Your employee’s correct legal entitlements will differ depending on whether they are covered by an Award, Enterprise Agreement, or Award free.
For example, if your employee is covered by an Award or Enterprise Agreement, they may have a legal entitlement to the following:
- A higher rate of pay for doing early morning, night or weekend work
- A higher rate of pay for working more than 7.6 hours a day / 38 hours a week
- 5% Annual Leave Loading when taking annual leave
- Payment for fuel or travel time when travelling between clients
- Meal allowance if working 1.5 hours overtime without notice
- Increase to their rate of pay in line with the 3% national minimum wage increase effective 1st July 2019
Even if the employee has agreed to a proposed rate, the employer is responsible for ensuring they provide the employee with a rate that is high enough to cover for legal entitlements.
So how can you ensure your meeting your legislative requirements when it comes to paying employee entitlements?
At wattsnext we conduct the Better-Off-Overall-Test (or BOOT in short).
We regularly do this for our clients to ensure they maintain above Award conditions for their staff and stay on the right side of the law.
With the recent minimum wage increase totalling over 10% in 3 years, now is the perfect time to consider reviewing your wages (especially if you haven’t reviewed them in a while).
“A strong culture is essential for high performing business and all your good work can be undone instantly through underpayment reputational damage”
Ensure you are paying your employees their correct entitlements. No matter how innocent the error may be, the detrimental impact to company morale and your reputation will be devastating.
Our experience shows accidental underpayment issues are rife in the Small to Medium business world. Not being aware is not a defence. If you are unsure or have concerns about underpayments contact our amazing team of HR Consultants at wattsnext to find out how we can help you have peace of mind.
Photo by Sebastian Herrmann.
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