Wage Theft Is Now Law – Don’t Get Caught Out!

Wage Theft Is Now Law – Don’t Get Caught Out!

Wage Theft Is Now Law – Don’t Get Caught Out!

man in prison

In Victoria, from 1 July 2021, it becomes a crime to:

  • deliberately underpay workers
  • dishonestly withhold wages, superannuation or other employee entitlements
  • falsify employee entitlement records to gain a financial advantage
  • avoid keeping employee entitlement records to gain a financial advantage

These crimes are punishable by a fine of up to $198,264 or up to 10 years’ jail for individuals and a fine of up to $991,320 for companies.

Victoria’s wage theft laws target employers who deliberately and dishonestly withhold wages and other worker entitlements.

Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.

What is defined as an Entitlement?

For some clarity, wage entitlements include

  • Wages or salary
  • Allowances & gratuities
  • Annual leave
  • Long service leave
  • Meal breaks
  • Superannuation

Employers must provide their employees with at least the minimum pay and conditions outlined in the relevant award, workplace agreement, contract of employment or legislation.

The minimum pay rates and conditions in awards, legislation, and registered workplace agreements cannot be overridden by a contract or by an agreement with the employee that provides for less beneficial entitlements.

Who can be held responsible?

Wage theft offences/charges can apply to;

  • directors
  • office holders
  • partners
  • people who may make substantial business decisions on behalf of the employer

Ignorance of the law is no excuse and choosing not to pay an employee an entitlement they have under an award, legislation or registered workplace agreement may be considered wage theft.

What does wage theft look like?

Examples of this might be

  • not giving workers meal breaks or paying the appropriate wages if meal breaks aren’t given
  • not paying penalty or overtime rates for extra hours worked
  • not paying specific allowances
  • altering timesheets to not show true hours worked
  • instructing staff not to record all hours worked on wage records

Payroll regulations are quite complex and we highly encourage all employers to undertake an audit on their payroll systems now to ensure you are in compliance.

Further information can be found at https://www.vic.gov.au/victorias-wage-theft-laws

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

2021 Annual Wage Review

2021 Annual Wage Review

2021 Annual Wage Review

Staff review meeting

The Fair Work Commission has handed down its decision in the 2020/2021 annual wage review. This decision increases the minimum rates payable to both modern award covered and award free employees. 

Summary of Decision

  • Minimum wages in modern awards will be increased by 2.5%.
  • The increases will apply in three stages with the rates in most modern awards increasing from the first full pay period commencing on or after 1 July 2021.
  • The increases in some awards will be deferred to the first full pay period commencing on or after 1 September 2021 or 1 November 2021.
  • The 2.5% increase will also apply to the national minimum wage, raising it by $18.80 to $772.60 per week, or $20.33 per hour.
  • The national minimum wages for juniors, employees under training arrangements, and employees with a disability have also been increased by 2.5%. 

Modern award covered employees – Minimum wages

The minimum rates of pay for adult employees covered by a modern award are to be increased by 2.5%. The weekly wages will be rounded to the nearest $0.10.

The increases will flow through to junior employees, employees to whom training arrangements apply in modern awards (including the rates under the National Training Wage Schedule), employees with a disability and piece rates.

Effective Dates

Due to the impacts of COVID-19, the increases awarded in last year’s annual wage review were deferred for the majority of modern awards. The minimum wage increases in these awards took effect in either November 2020 or February 2021.

The Commission has again decided to stagger the award wage increases, albeit to a lesser extent. The minimum wages will increase in all modern awards from the first full pay period commencing on or after 1 July 2021, with the exception of:

the General Retail Industry Award 2020, where the increase will come into effect from 1 September 2021; and

the following modern awards, where the increase will come into effect from 1 November 2021;

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations –Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Traveling Shows Award 2020
  • Wine Industry Award 2020

Award/agreement free employees – Minimum wages

Award/agreement free adult employees are covered by the national minimum wage. This will be increased by $18.80 to $772.60 per week (or $20.33 per hour) from the first full pay period on or after 1 July 2021.

Casual award/agreement free employees are also covered by a default casual loading which remains at 25%.

The increase will flow to award/agreement free junior employees and employees to whom training arrangements apply. These wages will continue to be set by reference to the Miscellaneous Award 2020.

The increase will also flow to award/agreement free employees with a disability. Where the disability effects their productivity, these employees will continue to be paid in accordance with an assessment under the Supported Wage System Schedule. The minimum weekly payment for these employees (currently $89) was not increased as part of the annual wage review but is expected to be reviewed prior to 1 July 2021.

What do I need to do?

Employers should ensure that employees who are paid in accordance with a modern award or the national minimum wage receive the appropriate pay increase by the relevant effective date.

Employers who do not pay strictly in accordance with award terms (e.g. those that pay above award rates, annualised salaries or ‘flat rates’ of pay) should ensure that their payments will still satisfy all of their obligations under the relevant award/minimum wage once the increases apply.

Employers who pay in accordance with an enterprise agreement should ensure that the base rates of pay under the agreement are no lower than the increased modern award rates of pay, particularly if the agreement was made a number of years ago.

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

Are you at risk of underpayment of wages?

Are you at risk of underpayment of wages?

Are you at risk of underpayment of wages?

Wages Wooden Blocks

The underpaying of wages is a common issue in many industries. Awards & regulations are complex and confusing often resulting in business owners not paying their wages correctly.

This has gained a lot of media attention recently but it has also highlighted how critical it is to ensure you’re processing your business’s wages correctly.

A typical payroll process follows a sequence of regular routine tasks that result in the payment of wages to your employees.

At a glance the process is:

  1.  Employee clocks in and out using a manual or digital record.
  2. The supervisor reviews this record, allocates against work departments, makes adjustments and exports/sends records to payroll.
  3. Payroll officers process pay run using guidance material to calculate penalties, loadings and allowances.
  4. Leave and other additional adjustments are processed
  5. Responsible Manager reviews proposed payments, including deductions, pay rate changes and terminations.
  6. Bank payments are approved.
  7. Pay is finalised, STP generated and payslips sent to employees
  8. Employees receive funds in their account.

What are the biggest causes of the underpayment of wages?

  • Timesheet records are incomplete or obviously incorrect as employees have not clocked in or off as required.
  • Supervisors or Managers make adjustments to the records that are not explained or undermine the integrity of the data, such as change the working hours by removing overtime, so only base hours are paid.
  • The actual payroll data collected and then entered at various points through the process is incorrect. This might be
    • because an employee has made an error (which has not been identified).
    • incorrect interpretation or calculation of award conditions.
    • payroll has been set up incorrectly or rules have changed and not been updated.
    • payroll staff have not been trained or updated on the rules.
  • The initial engagement of an employee including employment contracts, leave entitlements or even employment classification (Full time vs Casual) is incorrect or does not adhere to their award or enterprise agreement.
  • An employee is engaged on a flat annual rate (annual salary) but payments have not been reconciled to the award to check they have been adequately compensated.
  • Failing to provide payslips to employees.
  • Superannuation liabilities being paid late.

Underpayment of wages (wages theft) is a particularly relevant topic at present with significant focus in the media, political arena and with union representatives.

Failure to adhere to the requirements can result in Employers facing court, significant fines and penalties and back wages being awarded severe penalty interest amounts. A recent determination saw a $5,000 underpayment result in fines & penalties amounting to $230,000.

From July 1st 2021, wage theft laws introducing criminal law penalties for deliberate underpayments will come into effect in Victoria. They have already been introduced in Qld and some speculate may be introduced at a Federal level in the very near future.

What can Employers do to reduce their risk of underpaying wages?

  • .Provide ongoing, relevant training to all payroll administrators ensuring they are kept up to date on award changes, industry updates and at state & federal levels.
  • Encourage employees to check their payslips and to ask questions directly to the payroll administrator if they have any queries. These should be dealt with quickly and if necessary training provided to employees to help them understand their pay & entitlements.
  • Make sure there is a process to ensure that any changes to employee entitlements or conditions are understood and undertaken by a person with the correct authority to do so.
  • Any changes to an employee’s terms & conditions of employment are formally recorded and stored in their employee file.
  • Ensuring that correct, accurate data from an employee’s contract is shared with Payroll administrators not left to interpretation or assumptions.
  • A training process is in place for Managers approving payroll payments to check the data, understand the entitlements & payments being made and that approval is not just a cursory glance of how much is going into the employee’s account.
  • Have internal process & controls to;
  • check & verify that payroll liabilities are reconciled between the payroll system and accounting system
  • check payroll liabilities have been paid in full, before their due dates
  • confirm STP is lodged and actioned on time and records have been reviewed for accuracy
  • liability payments have been correctly processed into your accounting system
  • lodgement records for payments are saved down into your payroll records
  • ensure new employees are correctly inducted into your business, all forms & processes required by law are followed for compliance
  • annualised salaries are reviewed back to the award on an annual (or more frequent basis) and adjustments, if needed, are processed accordingly

There is a range of industry or governing bodies that can assist with templates and guidance around award compliance specifically for your industry. As a start, you can view the Government’s Fairwork Website.

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

Change to Casual Employees

Change to Casual Employees

Change to Casual Employees

Information all Employers need to know

cyber-security-laptop

The Federal Govt last week approved a number of changes to casual employees and a number of other elements to their working relationship with employers

Definition of a casual employee:

If a person is:

  1. offered employment without a “firm advanced commitment to continuing and indefinite work”; and
  2. the person accepts that offer, 

then they are deemed to be a casual employee.

What is firm advanced commitment to continuing and indefinite work?

  • whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  • whether the person will work as required according to the needs of the employer;
  • whether the employment is described as casual employment; and
  • whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

If your relationship with your employee does not address all of the above, then they are most likely not going to be considered as a casual employee, under the law.

New rights apply to Casual Employees

The 2nd aspect of the bill is a casual conversion clause.

Employers must offer to convert a casual employee to permanent employment if the employee:

  1. has been employed for 12 months; and
  2. during the last 6 months, has worked a regular and systematic pattern of hours without significant adjustment. 

There are some specific exclusions to this that should be discussed with your HR representative.

Other points to note;

  • The Casual conversion requirement will not apply to small business employers with less than 15 employees.
  • Where an employee refuses an offer to convert, they no longer hold a right to request conversion at a later date.
  • ALL casual employees will be required to be given a copy of the new Fairwork Casual Employment Information Statement – which will explain the above entitlements to them
  • the Bill also deals with historical problems that have been created where employers misclassify employees as casuals and fail to accrue leave entitlements for these employees. 
    • Where an employee is found to have been incorrectly engaged as a casual (that is, they are at law a permanent employee), the Bill creates an express right for employers to offset any leave entitlements owed to the employee against the casual loading that is often paid to the casual employees. 
    • In order to have the benefit of this offset arrangement, the loading paid must have had components that can be identified as being paid to the employee instead of one or more leave entitlements.
    • To this point, it is highly suggested that payslips, contracts or agreements clearly identify that a casual loading is paid, how much that loading is (that is preferable as a separate amount or line on a payslip)

What should Employers do now?

Now is the time for Employers to review and if necessary clean up any of their casual arrangements.

They should be looking to:

  • Introduce new contracts that align with the amendments
  • Consider and identify staff to be offered casual conversion and put in place a process to achieve this

The Fairwork Casual Information statement will be available for Employers on their website soon.

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

COVID Vaccine

COVID Vaccine

COVID-19 Vaccine

Can I make my staff get the jab?

cyber-security-laptop

Let’s be really clear here. In the current circumstances, the vast majority of Employers should assume they won’t be able to require their employees to be vaccinated against coronavirus.

Potentially, some specific industries or limited situations may apply where a vaccination may be required.

It would be wise to seek appropriate legal advice if you are considering making coronavirus vaccinations mandatory in your workplace.

There will be a raft of information available on the vaccine roll out and we would suggest Employers seek guidance from their Industry bodies or direct from the Fairwork website before taking any actions.

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

JobKeeper is Ceasing

JobKeeper is Ceasing

JobKeeper is Ceasing

How this might impact your current staff arrangements

cyber-security-laptop

Is your business is still receiving support & payments for staff under the job keeper scheme?

Have you made arrangements with staff to work from different locations, work reduced hours or stood them down?

The job keeper scheme is scheduled to finish on March 29th, 2021.

What does this mean?

All job keeper enabling directions will also cease to be in effect on 29 March 2021.

There were 3 types of job keeper enabling directions available to Employers:

  • a job keeper enabling stand down direction, including a direction to reduce an employee’s hours
  • a direction in relation to the duties to be performed by the employee, and
  • a direction to perform duties at a place different from the employee’s normal place of work, including their home.

If your business had or made any of the above arrangements during the Covid pandemic, please be aware that these will cease to operate from the date highlighted above.  Employment engagements need to revert to those in place prior to the covid pandemic for all staff.

For example;

Mary is a cleaner at The Oval. Prior to the covid pandemic, she worked a full-time roster of 38 hours per week, Mon to Fri. During the pandemic as there was insufficient work a job keeper enabling direction was given to reduce Mary’s weekly hours to 30 hrs per week.  From March 29th, 2021 her roster needs to revert to 38 hours per week Mon to Fri.

With just 4 weeks until these changes come into effect, now is the time to plan and review how your workplace will handle the return of staff, changed staff hours or staff returning to their previous work locations. It is best practice to communicate early with affected employees so that they too understand the changes and are ready to return.

Consultation when lifting a stand down direction may also be a requirement under an applicable award or agreement, employment contract or workplace policy. All awards and enterprise agreements contain consultation provisions, which could apply in these circumstances.

As an employer, you will also need to consider any specific state restrictions around workplace occupancy levels, your covid safe plan requirements or other current restrictions that might be in place.

Further information can be found at https://coronavirus.fairwork.gov.au/

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us