When he is investigating breaches of workplace rights, the Fair Work Ombudsman comes across a few pearlers of excuses from bosses for underpaying employees.
Nicholas Wilson says some of the excuses he has heard range from “we don’t have time to provide pay slips” or “opening and closing the business is part of the job, and you don’t get paid for it.”
“I have to say that in the main, our experience is that most businesses try to do the right thing by their staff, but obviously we do come across some that take short-cuts because they simply haven’t bothered to access the information they need to make the right decisions,” he says.
The Ombudsman has pulled together a list of the 10 most common excuses made by employers about how they pay their staff, have a read and make sure you haven’t found yourself muttering one of these under your breath.
It’s wrong to make this kind of judgement according to the Fair Work Ombudsman.
“Fair Work Australia sets minimum wages, including for different classifications under the award system,” Wilson says.
“Your obligation is to pay the applicable rate, regardless of how you value their work.”
The Fair Work Ombudsman says it’s a legal requirement that workers receive their full entitlements and this applies to all businesses, large and small.
“We take contraventions seriously, as do the courts,” he says .
“But our first preference is to work with people to help voluntarily correct any mistakes.”
Whether others in your industry are doing the right thing or not doesn’t affect your obligations according to the Fair Work Ombudsman.
Wilson says employers still need to pay the minimum rates of pay set out in your award or agreement and if you’re not paying staff correctly, you could be subject to penalties.
The Fair Work Ombudsman says it doesn’t matter if the employee agreed to a lower rate, as they’re still entitled to the applicable minimum wage.
“An employee’s consent doesn’t diminish your obligation to pay the current rate in your award or agreement – you must provide an employee with back-pay if they have been underpaid.”
Unless specified, an employee’s performance or experience doesn’t affect what you have to pay according to Wilson.
Employers are obligated to pay the minimum rate under your award or agreement.
“Unless it’s part of an education or training course, all work performed by an employee, including opening and closing times, must be paid for,” Wilson says.
The Fair Work Ombudsman says genuine independent contracting can be a good way to manage demand for goods and services.
But Wilson warns it can sometimes be difficult to work out if an employee is an independent contractor or not.
“Independent contractors are subject to different tax, insurance and superannuation requirements,” he says.
“If classified incorrectly, employees could miss out on entitlements like annual leave.”
The Fair Work Ombudsman warns that providing a pay slip is not optional, it’s an essential part of an employer’s record-keeping obligations.
“An employer must issue all employees with a pay slip within one working day of paying their wages,” Wilson says.
“If they don’t, they’ll be contravening the Fair Work Act. Our website has simple record-keeping and pay slip templates to help employers comply with their obligations.”
Not complying with your obligations is unlawful and can result in unnecessary workplace complaints, significant claims for back pay or lower staff productivity and retention according to the Fair Work Ombudsman.
Wilson suggests using the Fair Work Ombudsman’s info line to help you to understand the award system and your obligations.
The Fair Work Ombudsman says it’s an employer’s obligation to find out about their workplace responsibilities, even if it’s an area they aren’t familiar with.
Wilson recommends using the Fair Work Ombudsman’s info line and website to correct the errors that led to the underpayments and put processes in place to ensure they won’t happen again.
The Fair Work Ombudsman’s position is that there is no place for guesswork when it comes to workplace obligations.
“Whether you agree with the law or not, these are legal minimum obligations,” says Wilson.
“Failure to comply with your obligations can result in you being liable for back pay and potentially subject to a workplace complaint and possible enforcement action.”
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
