Last night the Senate passed legislation delivering a ten-fold increase to employer penalties for breaching the Fair Work Act
The Fair Work Amendment (Protecting Vulnerable Workers) Bill was introduced largely as a response to unscrupulous employers not meeting their obligations in regards to pay.
Fines - under the old Act, fines were $63,000 per company per breach and up to $12,600 per individual per breach. Under the changes the new provisions allow for a tenfold increase for a serious contravention of the Act. Employers deemed to be engaging in deliberate systematic attempts to avoid obligations to employees, those employer penalties are now up to $630,000 per company and $126,000 per individual.
Changes also impact Franchises - any Franchisor is now liable for breaches of the Act by their Franchisees, if they knew or could have been reasonably expected to know that a breach was occurring.
The Act also places the burden of proof on an employer to show they have not breached the Act, so record keeping becomes imperative.
"Cash Bank"payments where part of the money paid to an employee is immediately repaid to the employer are also banned, with the Ombudsman having new increased powers to investigate.
Whilst the Bill has only just passed, it's not law yet. However it's a good opportunity for all employers to review their HR and Payroll systems to ensure they measure up.
At PJT we highly recommend automated payroll and time management systems as they are always up to date, and help manage rosters and attendance to automate payroll which will help avoid these types of employer penalties. Tanda is our preferred software application for this purpose, and it syncs beautifully to Xero.
If you're concerned about your payroll process, or would like to discuss implementing Tanda in your business, please contact your trusted advisor at PJT for a confidential discussion.