Wage theft has been mentioned (unfortunately), more than once this year in the Australian media. While we do have one of the most complex systems when it comes to pay, conditions and benefits, there is no excuse for not paying employees correctly. As a business owner you have a duty to ensure that your staff members are remunerated correctly for the work they do. Here are our tips to help pay your staff correctly
1. Know your award
Awards (also known as Modern Awards) detail the pay, specific conditions and entitlements. Each award is tailored to the specific industry or occupation it covers. A listing of all award and access to the complete details is available on the Fair Work Ombudsman website. It is essential to understand which award applies to your business so you can correctly apply the correct payscale and entitlements.
To make it a little easier on businesses, Fair Work also has extracts of just the pay scales and presented in fairly easy to read and interpret tables. While it does not make it failproof, reviewing this will help you to understand what and how you need to pay your employees
2. Set up systems, checks and balances
There is no need to go out and implement an expensive and sometimes complicated technology, to ensure you are correctly paying your staff. The focus here is to ensure you have an internal system that supports appropriate checks so you can pick up payroll errors early. Things to think about here is; timesheets – how do your staff record their hours? Do you pay your staff just lump sum hours, or do you breakdown there hours? Thinking about different strategies and systems to help pick up errors early is important. There are a number of relatively cost effective payroll systems that do have awards built into them and can make processing payroll for efficient and assist to reduce the errors.
3. Budget and plan your payroll
Budgeting is not just good financial management practice but can help businesses pick up payroll errors, including over and underpayments. Identifying what your payroll should be can help business owners quickly identify errors when reviewing documents. It also means you are not going to have any surprises when it comes to paying your payroll, you will know exactly what you need to keep the business going and will not be backed into a corner to be creative with how you pay people.
4. Regularly conduct a payroll audit
Even with the best intentions and systems, things can still fall through the cracks, having regular once a quarter payroll audit will help you pick up any issues early and will allow you to fix any errors and the reason why it occurred. Some people will suggest doing it once a year, just before end of financial year – yes you should do one last reconciliation before the final pay run for the financial year, but doing it quarterly will help you pick up small errors early and resolve and not just one big error at the end.
5. Deal with it when something has gone wrong
When a staff member raises concerns about there pay do not ignore it! Listen to there concerns, and investigate, but look beyond just that staff member and most importantly report back to them (even if there are no issues). Provide them with the relevant evidence or a rectification plan. If you do find an error with one staff member it can be a good indication that there might be others, take the opportunity to review and audit all staff.
How can we help?
Does the above sound all a little daunting? With over a decade worths of experience in determining and interpreting awards, setting up and auditing payroll systems – we can support your organisation to get it right and mitigate business risks. Book a confidential consultation with us today!
On the blog next time….. Changes to annualised salaries and what it can mean for your business!