Peace, joy and turning a new leaf?
The end of year is a time to reflect. Sometimes, under the influence of Christmas dinner or a little time on our hands, we make resolutions. These will often be about personal or professional development: stop smoking; reduce drinking; get more exercise; spend more time with the family. On the professional side it might be: join a professional association; delegate more; give away those services and product lines that are not working.
These goals are great. Achieve one or more and you are probably in line for a gold star. Now friends and mentors could undoubtedly suggest a number that you might consider. But if you are running a business, it might be smarter to have a look at what the Fair Work Ombudsman has been doing. The Tax Commissioner is not the only person undertaking audits, you know! On the Fair Work Australia website are set out the audits under way; those intended; and the findings from some of the recent works completed. These are the industries listed on the Fair Work Ombudsman’s site under “Audits and Campaigns” :
• Hospitality
• Structural metal product manufacturing
• Vehicle repair & maintenance
• Clerical workers
• Security industry
• Retail industry
• Fuel retailing
• Residential building industry
Let’s look briefly at just four of them.
Security Industry
Fair Work Australia had conducted a campaign in 2009, so this was a re-visitation. The pleasing aspect was that the contravention rate had halved from 53% of those surveyed to 27%. These were the areas of contravention revealed in this year’s analysis: Wages (36%), Penalties (18%), Payslips/Record Keeping (24%), Public Holidays (9%), Overtime (5%) and Other (3%). In some cases, the managers were unaware of award provisions, in others they relied on accountants who were equally ignorant. Neither, of course, is a defence.
Vehicle Repair & Maintenance
This audit concentrated on pay slips and time and wage records. The analysis of was completed in August 2012. This showed 445 (59%) employers were compliant and 314 (41%) were found to have contraventions – 39.5% of these were underpayments, 54.1% were contraventions relating to time and wage records or pay slip requirements and 6.4% involved both.
Retail Industry
This audit resulted in more than 750 workers at retail stores throughout the country receiving a bonus – more than half a million dollars in back-pay. This followed $4.7 million in underpaid entitlements being returned to employees in the previous year. Underpayment was not the only issue. Retailers were found to be employing adults only; requiring staff to make purchases in-store and then deducting the amount from wages (an unlawful action); incorrectly classifying employees and then underpaying their entitlements; and requiring them to set up or close outside trading hours for no payment.
Clerical workers
In this audit, a third of the businesses were in the recruitment sector and the balance in the accounting sector. The result was that 1232 (76%) of employers were compliant and 389 (24%) were in contravention – these related to underpayment in a third of cases and the larger balance related to failures in the rime and wage records or pay slip requirements.
The dog ate my homework and similar reasons
The reasons provide by employers as explanation for their contraventions don’t bear very close scrutiny in the cold light of day :
• My employees agreed to that rate;
• Isn’t that what everyone pays?
• We are a small firm, we can hardly pay every entitlement;
• We pay what they are worth;
• We don’t have time to provide pay slips;
• Sub-contractors are not my responsibility;
• I can’t be bothered learning about it;
• I just applied my common sense; and
• I thought I only had to pay wages
There is no doubt that the majority of businesses try and do the right thing by their employees. However, the obligation is unambiguously on the employer to be informed and be compliant. Just as it is critical to ensure that risk managers, fraud investigators, IT security and business continuity advisers are current in their knowledge and approach, so managers must satisfy themselves that their accountants and payroll staff practise continuing education and maintain their currency. Membership of professional associations is often a useful way of ensuring managers are informed and in the position to ask the right questions – and there is always the Fair Work Australia information line.
Resolution
To keep informed about your obligations; to have a network likely to alert you to changes; to use the freely available sites to check; and to require your key advisers to certify to you that your business is meeting all its legal obligations. That would be a fairly useful resolution to save on your first day back at work in 2013, wouldn’t it?
All reasonable care has been taken in the research and preparation of this assessment. However, G P Walsh & Associates (GPW) is not responsible for any non-disclosure by the client, its agents or contractors or by government websites, regulatory authorities or other persons GPW has interviewed or consulted in the preparation of this assessment. By commissioning a report, the client acknowledges all such reports require accurate information to inform the detailed assessments and GPW is neither responsible nor liable for any omission or error in its reporting, unless professional negligence is proven. Furthermore, no such inquiry is definitive and GPW can only make an assessment for further consideration of its clients.