Business 360 review thousands of employee entitlements each year, and reveal the most common pay mistakes they typically see.
Most employers often don’t realise pay mistakes until it is too late. Underpayment breaches can lead to fines, penalties, large back-pay amounts (up to 6-years) and prosecution underneath the civil or criminal laws.
Commonly, we find that when checking pay information, accidental errors are made that put the Employer in breach of the applicable legislation, such as:
Salaries
- Are not calculated correctly to include “all entitlements” due, such as annual leave loading.
- Missing contract terms that support the agreed salary – some awards now require the employment contract to state the amount of each inclusion, such as overtime, in a salary “set-off clause”.
Hours of Work
- The designated start or finish times may be outside the allowable spread of hours per the award or the terms of the employment agreement, attracting overtime payments.
Incorrect Award
- Sometimes ‘multiple awards’ apply to an employer, which can mean some employees are misclassified into the incorrect award.
- For example; Someone performing clerical duties isn’t necessarily paid under the Clerks – Private Sector Award.
All-inclusive Hourly Rates
- Above award pay rates may appear higher than the award base rate, but when you factor in all the entitlements due, they are often found too low according to the applicable award.
Employment Type
- The employment type can attract different overtime rates, rules for how many hours the employee can work and different penalty loadings that can apply on top of the hourly rate.
Without clarity around the employees’ pay structure and their entitlements underneath the applicable industrial instrument, you may find yourself accidentally underpaying your staff.
As part of the Business 360 service, we check that you are paying their staff in accordance with the applicable industrial instrument while considering the businesses wishes around work practices.
Please contact the team at Business 360 on PH 1300 287 360 or info@business360pps.com.au today for further clarification or questions.
