The recent spate of Fair Work crackdowns has increased concern for small business owners, as the severity and prevalence of non-compliance and underpayment continues to increase.
Fair Work recently imposed a $143,000 penalty against a Brisbane Business Owner and his former internal Payroll and Account Manager, after it was uncovered that they had deliberately underpaid staff at a Japanese food outlet. While business owners have always been liable for such breaches, it is the first case of a payroll manager being penalised under accessorial liability.
Accessorial liability has been one of the preferred tools wielded by Fair Work recently, as it focuses on looking past the principal company to further down the supply and managerial chain.
The increase in the number of wage underpayments, has led the Federal Government to introduce the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. The Bill intends to increase the maximum penalties for those found breaching the Fair Work Act. It will seek to hold franchisors and holding companies responsible for actions of their franchisees and subsidiaries, if they are found to be in breach of the Fair Work Act.
If passed, this legislation will see the maximum penalties for a company increase from $54,000 to $540,000, and maximum penalties for an individual increase from $10,800 to $108,000.
Fines will be imposed for each offence, and could potentially see businesses facing over $1 million in penalties, for breaching the Fair Work Act.
Fair Work has strict compliance guidelines and regulations regarding pay rates, payslip laws and staff leave entitlements. Business owners therefore need to be proactive in their approach to compliance, to ensure that they are legally meeting their compliance requirements.
Businesses looking to gain greater compliance comfort and oversight into their business should implement workforce management software solutions for peace of mind and security to managing and paying staff. These solutions not only automate Award and EA calculations (where most of the payroll mistakes occur), but also provides oversight into the entire business, including pay rates, staff attendance and wage costs.
For more information regarding the Fair Work Act and regulations please visit the Fair Work site.