Covid-19 is no reason for taking your eye off the ball on wages compliance
We are all being impacted in different ways by Covid-19. We are under pressures in running our businesses that have never occurred before. For many businesses making small savings day to day may well be the difference between continued operation and having to throw our hands in the air and give in. In these difficult times, we would all be forgiven for thinking that now is not the time to introduce new penalties, however a number of State governments do not agree with this sentiment. Victoria, and now Queensland have passed legislation which not only makes it an offence to underpay employees, as it already is, but they have introduced the additional penalty of potential imprisonment for business owners and operators.
In our experience, deliberate underpayment of wages is rare. However, as we have seen in the media for some time now, underpayments do occur. Sometimes it is the complexity of the Award system which has created the problems, in others it is a misunderstanding of the employer obligations and in others it is just a calculation error. These instances, when identified, should absolutely be rectified and employees back paid every cent that is owing to them. I am sure we all agree that we, as employers, should be making a concerted effort to identify if we have made any errors in the past as well as ensuring that we don’t make them in the future.
We are saddened to see genuine error being labelled “wage theft”, and employers vilified particularly when they have identified the error themselves and have commenced a process of rectification. Despite this, the State governments in Victoria and Queensland have introduced legislation to make underpayment of wages, in some instances, a criminal offence. It remains to be seen if genuine error will escape being captured. We believe that business operators usually do their best, but is our best going to be good enough? Will we be able to convince regulators that any error was genuinely inadvertent?
The introduction of the Jobkeeper wage subsidy, which is a vital lifeline for many businesses, has added to the complex wages environment in which many businesses operate. This will only get more complex at the end of September when rates and eligibility criteria change and employers are asked to apply a two tier wage subsidy to its workforce.
Now is not the time for employers to take their eye off the ball with wage compliance. Now is not the time to think it’s alright to bend the rules to save a much needed dollar. We have been surprised in these difficult times, by the increase in clients seeking payroll audits/reviews, however as the risks of getting it wrong continue to escalate it makes business sense and also provides for peace of mind. Mazars’ HR and accounting advisors are well placed to undertake these reviews bringing together Industrial Relations, Human Resources and Accounting expertise. Importantly, these reviews can also identify where employers may, in fact, be able to make savings in their payroll systems. If you have any concerns or questions about the accuracy of your payroll system and remuneration practices, now is the time to reach out for assistance.
If we can be of assistance in obtaining the peace of mind that employers need, please contact our HR Consulting specialist, Cheryl-Anne Laird, at email@example.com or 0412 746 419.
+61 7 3218 3900
+61 3 9252 0800
+61 2 9922 1166
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of the Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Mazars and the source of the publication are duly mentioned. In all cases, Mazars’ intellectual property rights are protected and the Mazars Group shall not be liable for any use of this publication by third parties, either with or without Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.