Why is it so hard to pay people correctly?
Most people never have to worry about the payroll compliance process required to get someone paid. It’s not a hugely riveting subject; I mean, staff go to work, they work, they get paid.
However, as Fair Work’s list of big companies failing to pay legal wages continues to grow, society is starting to wonder why is it so hard to pay people correctly?
For the past three years we have made it our business to know the intricacies of payroll, and how to build software which automates the complexities of getting people paid. Currently calculating over $500 million in casual and part-time wages each year, we’re an advocate for those who have the best intention and efforts to pay their staff correctly.
With each new wage rate transgression I’m reminded of an old industry saying, “a good payroll officer is somebody nobody knows.” An understanding that attention is only paid to your payroll when there are errors, under-payments or the pay is late.
What most don’t realise is that behind a simple payslip are legal questions covered with grey and varying shadows of complexity. Australia is routinely identified as one of the most complex countries to run payroll in, with workforce administration, payroll compliance requirements and regulations identified as the major complicating factors.
Far from magic, the time and expertise required to calculate some pay could convince any seasoned mathematician to hang up their wand. In total, Australia has 122 Modern Awards with an average Award having between 180-200 individual rules. These rules specify pay rates for overtime hours during the week and weekend, overtime for RDO, public holidays, late night shifts and employee classification, just to name a few.
For big brands and large groups, these calculations are often decentralised, leaving the responsibility to those at ground level without the necessary incentive or knowledge for strict adherence. Broadly, for those who had identified systemic issues, they simply didn’t know how to begin to resolve them.
Read a Modern Award document cover to cover, and you’ll empathise with small business owners and executives who might simply not understand the problem, let alone how to guarantee organisational wide compliance.
So yes, payroll compliance is hard, complex and costly, but does this excuse paying below minimum entitled wages? Unfortunately not. Complexity is no excuse for non-compliance.
It’s the responsibility of businesses, of all sizes, to properly comply with the law. Rather than being loose with interpretations, the answer is to invest in solutions that incentivise and reward compliance management whilst reducing the regulatory burden.
Fair Work are unlikely to slow in their mission to bring uncompliant businesses to light, so it’s time for businesses to get smarter about how they manage their workforce and compliance responsibilities.
Being smarter and more innovative is the only way to control labour spend in the productive, high-wage workplaces of the future. It’s time to use wage compliance management as a competitive edge.
Our company is passionate about building solutions to help good businesses be more efficient while lifting those struggling under the weight of Australian workplace laws. The solution to this problem, if it wants to be solved, is technology.
Sign up for a trial of Tanda Enterprise Edition to significantly improve your wage compliance oversight and labour profitability.
Tasmin Trezise is a founder of workforce management software, Tanda, which helps businesses get the most from their workforce.
Awards & Rostering |
Easter Penalty Rates 2015 — What you need to know about paying staff
Easter is coming up soon, and that means two things! A new season of Game of Thrones to feast on, and – perhaps less excitingly – public holiday rates to pay staff. As a business owner, accountant, or bookkeeper, it’s important to be aware of how public holiday rates over Easter and ANZAC Day should be paid in your state. First, let’s see when the holidays will be in 2014. You might be surprised! If your business is open on any of these public holidays, you’ll need to pay staff the appropriate public holiday rates. You should check your award, which will tell you exactly what multiplier or penalties to apply, often under a Public Holidays section. A common multiplier is 2.5x. Some businesses pay staff salaries, or pay casually “above award”. Public holiday penalties still apply! If you have a contract, it should cover this – check with Fair Work if you are unsure. Staff who don’t work on a public holiday If you have full or part time staff who should have worked on any of the weekday public holidays – Good Friday, Easter Monday, and Easter Tuesday in specific cases – they are still entitled to pay, even if they do not work. Generally you’ll pay at base rate for the hours staff would have been entitled to. Of course, if staff do work on the day, you’ll pay at a higher rate as dictated by the award (see above). But keep in mind: this only applies if they usually work on that day. For example, a part timer in Queensland who generally works Tuesday to Thursday probably wouldn’t get paid the public holidays because there’s no public holiday on those weekdays. Check your award/agreement to be sure! If your award dictates how rostered days off work, you should check to see if staff with an RDO on a public holiday are still paid. In some states, some kinds of businesses are not permitted to open on public holidays due to trading regulations. If this applies, you will probably still be required to pay staff who would otherwise work on that weekday. Again, if you’re not sure, it’s best to ask. Staff who work on a day that isn’t a public holiday Keep in mind that the rest of the award doesn’t shut off just because it’s Easter. For example, if you are in Tasmania and pay Saturday rates, you’ll still need to pay these on Easter Saturday (which is not a public holiday for you). Did you know… If an employee takes sick leave around a public holiday (eg. Thursday April 24 to Monday April 28), they still get paid the public holiday if they were otherwise supposed to work that day (ie. full/part time) If an employee takes annual leave, public holidays during the leave period don’t count towards their annual leave balance Public holidays do not need to be paid for staff on unpaid leave Staff cannot be forced to work on a public holiday if they have reasonable grounds for doing so. Common reasons include: the amount of notice given, family responsibilities (especially over Easter), and whether one could reasonably expect the business to be open on a public holiday. Tanda’s employee time clocks automatically interpret industry awards – including public holidays – so you can be sure you paid staff right, without tedious manually data entry Add the Fair Work Infoline to your speed dial, they are always happy to help. The number to call for any payroll queries is 131 394. Note: none of the above constitutes formal payroll advice. Always check with your accountant, bookkeeper, or Fair Work.
Clients & Partners AU |
The Print Bar uses MYOB and Tanda to control costs
The Print Bar’s warehouse in the inner-suburbs of Brisbane is a symphony of people and machinery, churning out some of the highest quality custom t-shirt printing available in Australia. In just 5 years, Managing Director Jared Fulinfaw has grown from 2 employees in his parents’ garage to become one of largest suppliers of custom t-shirt printing in Australia, with 28 employees working around the clock, 7 days a week. It’s a resounding success story, but it’s clearly been no accident. Jared is keenly focused on running a lean business and striding ahead of the competition. Tools for rapid growth To run The Print Bar, Jared is hands on with everything and believes that up-to-date and forward looking financial data is essential. He uses MYOB to manage his finances, and Tanda to manage his people. “MYOB lets me keep track of my inventory and expenses, I even have my accounts reconciled fortnightly so I know exactly where I am. Tanda is for managing my biggest asset and my biggest expense – my team. To sell my product at competitive prices and maintain my margins, I need to be great at managing, rostering, and keep a very close eye on the costs of my staff.” “My team is everything,” says Jared. And the team agree — they say he’s the best boss ever. Rostering Every week, Jared uses Tanda to put together his roster. He starts by copying the last week’s so he has a template to work with, then makes any changes necessary based on availability or feedback from his team during the week. Next, he checks the roster’s cost – based on the award rules he’s configured – to ensure that he’s within budget. When it’s all looking good, he sends the roster out to staff by email. He generally does this well before the working week; if he needs to make any urgent changes afterwards, an updated roster by SMS alerts the relevant people. Attendance The Print Bar staff clock in and out of work using a Tanda time clock. It’s positioned on the wall near the entrance to the staff room, so it’s easy to spot and hard to forget! For Jared, the time clock acts as a virtual assistant – every day he gets a roll call of who clocked in, and who didn’t (based on their roster). And if someone’s not at work on time on a weekend, he also gets an SMS alert so he can quickly run in if need be. Timesheets and Payroll Every few days, Jared checks over staff timesheets, makes any necessary changes, and approves shifts when he’s happy with them. At the end of the fortnightly pay cycle, he clicks a button to export the timesheets directly to MYOB. Because Jared’s configured Tanda to work with his EBA, all of the data he downloads is mapped to the correct MYOB wage category – saving him hours he’d have spent doing it by hand.
Awards & Rostering Industry Insights |
Australian Businesses Suffer from Absenteeism
Definition: Absenteeism is the practice of regularly staying away from work without good reason. Everyone is guilty of absenteeism at least some point in their lives. But how do you know when absenteeism is becoming a real problem within your business? How much it is actually costing your business invaluable work time, productivity and money? A survey conducted in November 2014 by Direct Health Solutions, a firm that specialises in reducing workplace absenteeism, found that sick days are costing Australian businesses a record $33 billion in payroll costs and lost productivity. Sick days are not only costing Australian businesses money, they are also being incorrectly recorded. “Absenteeism levels are understated and incorrectly recorded in over 50% of organizations.” “To ensure employers understand the impact and cost of absenteeism to their business, companies need accurate recording and measurement systems in place” said Managing Director of Direct Health Solutions, Paul Dundon. Tanda, an award-winning time and attendance software, is a cloud-based system that helps small and large businesses manage their staff costs. Through the use of our automated time and attendance tracking software, in just a matter of minutes Tanda can calculate the total number of employees who take sick days along with the total cost of lost revenue and productivity due to absenteeism. Tanda offers a complete payroll administration system that allows businesses to manage and monitor time and attendance from any device at any time. The processing of an entire payroll that used to take hours to complete can be processed in a matter of minutes. You can trial Tanda yourself for FREE to see just how easy it really is to use. We guarantee you’ll never look back.