The High Cost Of Simple Mistakes

Damien Berglas from BNCC member People2Growth looks at the recent case of an employer who was audited by the Fair Work Ombudsman.

In a recent case by the Fair Work Ombudsman (FWO) the underpayment of staff relative to their award entitlements was determined.  This case highlighted that the organisation assigned incorrect classifications or pay points to some employees, applied an annualised salary rate for salaried employees which did not meet award entitlements, did not pay all additional hours worked by wage and salaried employees, and made other payroll system errors.  

This led to back-payments ranging from a small $1.51 to $131,336 for a total back pay of $15.3 million.  The FWO were satisfied that the underpayment was unintentional and the company has undertaken an Enforceable Undertaking.

These mistakes are relatively easy to make, particularly if you are not sure of which award(s) are applicable for your business, or your salaried staff are paid near to the award rate and are working longer hours than 38 per week without overtime payment.  Common law contracts are normally underpinned by an appropriate award, it is important to be aware of any that could be applicable.

The Superannuation Guarantee amnesty has come to an end and you are required to ensure that all staff are being provided their appropriate payments.

The Fair Work Ombudsman are taking these issues more seriously and may start to target smaller organisations in the future.  

Salary and entitlements are such a fundamental part of the employment relationship, if any BNCC members would like assistance to check their status People2Growth will provide a free hour towards an initial review of their contracts and payroll and assist in determining if there are any discrepancies that need to be addressed.