Public Service Announcement: Fair Work Crackdown

Katrina Marquez

2 March 2017    |   

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.

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.

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How much do full time staff really cost?

Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money. For a while there I went along with that, not really giving it much thought. But today the thought struck me – casuals miss out on plenty of benefits afforded to full and part timers, so are they really better off? I decided to investigate further. What follows may surprise you. First – how many days in a year does a full time employee work? Weeks in a Year: 52 Working Days in a Year: 260 So far so good. We’re going to ignore the 1 or 2 days that we’re off by, for the sake of a nice round number. Next, let’s look at this full time employee’s entitlements, in days. Annual Leave: 20 (4 weeks) Personal Leave: 10 (2 weeks) Public Holidays: 10 We’ll assume a 7.6 hour work day and 17.5% leave loading. So how many hours of leave are we paying? Annual Leave – Base: 152 Annual Leave – Loading: 26.6 Personal Leave: 76 Public Holidays: 76 Total Hours of Leave Paid: 330.6 Earlier we calculated how many days of work one can work in a year, now let’s subtract leave taken to get a more accurate figure. Days of Leave Taken: 40 Actual Days Worked in a Year: 220 Actual Hours Worked in a Year: 1672 Divide 330.6 (hours of leave paid) by 1672 (hours worked) and we get 19.77%. Remember, we are comparing this to the 25% loading paid for casual staff. So from this perspective, yes, your full time and part time staff are still cheaper – but only by 5.23%. And even that number is probably on the low side. We ignored long service leave and maternity leave because they are a bit more unreliable. Both they are also costs (or accruals) that can definitely add up! When you take into account the fact that you only have to pay casuals when you need them, it’s easy to see why more and more Australian employers are turning to casual staff. According to the ABS, this has been growing steadily since the 90’s, and today over 1 in 5 jobs in Australia are casual.

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Giving Employee Feedback: 7 Ways to Constructively Deliver Bad News

Wouldn’t management be so much easier if everyone just did their job? You might feel sometimes like your job description would better match that of a babysitter than a business manager. But the sad fact is, unless you provide your staff with proper leadership; productivity, efficiency, morale, and overall quality of work will suffer. Part of effective management is providing your personnel with feedback when they’ve done something incorrectly, or perhaps just less correctly than you would prefer. Ideally, you want to train your workforce to act as you would in a given situation. This takes time, patience, and consistent positive reinforcement. So how can you communicate to your beautiful and unique snowflakes that they’re not meeting your standards without alienating, offending, or irritating them? Here is a list of best practices that can help you deliver a difficult message in ways that will improve employee attitude, engagement, and performance. 1.      Focus on Positives Even if you’ve been stuck with the worst employee in the world, even if they come into work smelling like a Cypress Hill concert in un-ironed slacks made of organic hemp, you’ve got to find a silver lining. To be clear, this doesn’t mean sugar-coating the negatives. It just means balancing criticism with praise. Build employee confidence first, then present avenues for improvement. The thing to remember about creating a harmonious work environment is it begins and ends with being nice. The simplest gestures can prevent resentment, discontentment, and hurt feelings. Keep your employees happy, and you’ll be a much happier manager. 2.      Objectivity This can be tough. It’s important not to let your emotions get in the way of effective management. Subjectivity can get you into all sorts of trouble: favouritism, nepotism, and a plethora of other –isms worth avoiding. A cool head is needed for command decisions, plus your employees will reflect the attitudes you present to them. Come to work angry, and you’re likely to look out and see an office rife with cantankerousness. 3.      Always Deliver Negative Feedback in Person It’s a busy day, you hear a bad report, and you want to get it handled quickly. So you just shoot of an email with a textual reprimand. A very tempting scenario, but not the best idea. People can read into messages more or less than you intend. If there’s a problem with an employee important enough for you to respond personally, then it’s important enough to respond to it in person. 4.      Time your Feedback Correctly Timing is everything. You have to take the opportune moment. For minor infractions, or something of a sensitive nature (a conflict between employees for example), allow a bit of time to pass so that tempers might cool before addressing the situation. Similarly, don’t call an employee out in front of their peers. Wait for the right moment, when they’re not under scrutiny, to approach. You don’t want to embarrass an employee, and you never know what can get the blood running to someone’s cheeks. 5.      Location, Location, Location Along the same lines as timing, the location of a performance review can have a great impact on how receptive an employee might be to your suggestions. Go to an empty conference room, any neutral ground will do. 6.      Pay Attention to How You’re Being Perceived This means watching your phrasing and body language. Present problems in a sympathetic light, and avoid negative syntax: “I don’t think… You shouldn’t… This isn’t…” Maintain eye contact, without being creepy. Keep gesticulations, mannerisms, and movements calm and casual. Aggression is an animal instinct, don’t release the beast during a performance review. 7.      Be Clear With Your Criticisms, Leave No Room for Interpretation Convey your meaning quickly, clearly, and without ambiguity. Be direct with your employees, let them know exactly what you disapprove of, how they can improve, and if there’s a need for it: a warning as to what continued instances of the undesired behavior will result in. Alternatively, reinforce desired actions. If they’ve done anything right at all, mention it, and offer praise. Building an effective team is a complicated process, but armed with common sense and a healthy dose of positivity, you can put together an office environment that runs like a well-oiled machine.

Industry Insights    |   

5 Rules for Hiring “Perfect Fit” Employees

Job interviews are a lot like first dates. Nobody is really who they seem to be. They’re all putting their best feet forward in an effort to impress, enthuse, and excite employers about the possibility of finding a “perfect fit” candidate. Welcome to reality, where nothing ever works out so perfectly. Unfortunately, hiring the most excellent employees has very little to do with their qualifications, and a great deal to do with your hiring process. You’re the gatekeeper, and not just anybody can get into Oz and see the Wizard. No way no how. You’ve got to develop a foolproof process that considers the most important attributes of an employee. Then you’ve got to ascertain whether or not one among dozens of candidates has those attributes in a woefully abbreviated period of time. The good news is there are some overall maxims that will help you make a confident decision. So let’s get right to it with the 5 rules for hiring perfect-fit employees 1. Latent Talent Trumps Experience Depending on the position, people can be trained to do a job. True aptitude, however, is a relatively rare quality. While a list of positions on a resume might look wonderful, it might also give you an inflated view of a candidate’s actual abilities. An employee with potential, on the other hand, is an obvious and invaluable asset. These are the quick learners, the high risers, and the go getters. They are well-prepared for the interview, have stellar references, and those all-important lateral thinking skills. They can creatively circumvent even the most unforeseen circumstances, and get the job done on deadline. Look for ambition: those covetous of upward mobility, and a hunger for more responsibility. 2. Explain Job Requirements Up Front The ability to grow in a position is important, but that doesn’t mean you should hire someone unqualified. Ideally, your perfect candidate will have both talent and experience. To find out if this is the case, you must thoroughly vet your prospects. The most important part of that process is making sure they understand exactly what’s expected of them. This is important for two reasons. First, unclear expectations can lead to misunderstandings down the line. Second, focusing on the job, rather than the employee, elucidates the entire process. You can write a profile of your perfect candidate, and if you’re lucky, you may find someone who matches 70 to 80 percent of your criteria. What a resume doesn’t answer though, is whether or not they can’t perform in the position. If you focus on what’s required from a performance standpoint, in both the job description and in the interview, you can find out if a candidate has ever accomplished anything comparable to your needs. 3. Personal Involvement This is perhaps the most important item on your itinerary. You’ve got to engage your candidates. Spend as much time as possible getting to know who they are, what they’re goals are, and how they can contribute to your company. As we mentioned above, an hour long interview isn’t a lot of time to get a handle on someone’s personality. Multiple interviews are a tried and true practice. Talk to them on the phone before the face to face. And once they’re in the office if you smell even a whiff of talent, explore the roots of your intuition as much as your busy schedule will allow. Split multiple in-office interviews up with other managers if possible. In the best case scenario, you can have different managers examining different aspects of the candidate’s potential: technical skill, experience, creativity, etc. 4. Compatibility With workmates/the Work Environment You’re Trying to Cultivate One thing you can do that will go a long way in helping with number 3 is to consider how the candidate will fit into the overall work environment you’re building in the office. This can toe the line into over subjectivity, but it’s still a worthwhile practice. Ask yourself if this person can successfully navigate office politics, work alongside the other employees without problems, and if their values align with the ones your company prioritizes. 5. Go Deeper With References Everyone under the sun tries to load up their resumes with references that are likely to give glowing reviews. You must undoubtedly check these first, but why stop there? Ask for contact info from workmates, underlings, superiors, anyone they might have had contact day to day. You’ll likely gain some interesting insights from the results of a little extra research. Building the perfect office environment is no easy task. You have to do so block by block, and each block has its own merits and flaws. It’s a puzzle without edges and a few extra pieces. So the only way to get it right is through painstaking care, plus a little trial and error. Follow these 5 guidelines to get the process going. This is first part in an ongoing series by Tanda to help business owners do better business. Tanda’s mission is to make it easier for employers to create jobs and manage staff. We do this by helping managers understand and reduce staff costs. Our product features include rostering, time-clocks and award interpretation.

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About the author

Katrina Marquez

Customer Success: With a background in industrial relations, Katrina brings a wealth of knowledge to our Tanda team.

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Awards & Rostering

How much do full time staff really cost?

Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money. For a while there […]

Industry Insights

Giving Employee Feedback: 7 Ways to Constructively Deliver Bad News

Wouldn’t management be so much easier if everyone just did their job? You might feel sometimes like your job description would better match that of a babysitter than a business manager. But the sad fact is, unless you provide your staff with proper leadership; productivity, efficiency, morale, and overall quality of work will suffer. Part […]

Industry Insights

5 Rules for Hiring “Perfect Fit” Employees

Job interviews are a lot like first dates. Nobody is really who they seem to be. They’re all putting their best feet forward in an effort to impress, enthuse, and excite employers about the possibility of finding a “perfect fit” candidate. Welcome to reality, where nothing ever works out so perfectly. Unfortunately, hiring the most […]

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