The pitfalls of underpaying staff - what you can do to ensure it doesn't happen to you

A national service station operator has been fined for underpaying more than 200 employees, resulting in a $46,200 fine, as reported by Payroll News. 

The Fair Work Ombudsman (FWO) also ordered Freedom Fuels Australia to back pay a total of $191,197 to the 234 employees it underpaid between May, 2006 and July, 2009. 

Organisations need to ensure they have systems in place to accurately pay staff - or face large fines

 According to the FWO investigation, casual and part-time workers made up the majority of the underpaid workers, and the mistakes were predominantly made in the calculation of overtime rates, namely penalty rates for weekend, shift and public holiday work. 

So how can other businesses ensure they don’t make similar mistakes? 

Small to medium-sized businesses without dedicated HR staff can ensure they are better equipped to manage employees by using free employment documentation templates available through the Fair Work Ombudsman’s website. 

A series of Best Practice Guides have also been developed by the Fair Work Ombudsman to assist employers make better use of the provisions of the Fair Work Act and better understand other aspects of workplace laws. 

Businesses can also benefit by implementing a Workforce Management System, which records employee time and attendance as well as automatically calculating specific pay scales, modern awards, pay penalties and overtime rates. 

This pay information can then be imported into the organisation’s payroll system – further improving the efficiency and accuracy of the pay run. 

Real time Absence Management reports also allow management to view the Annual Leave and sick leave taken by employees to date, while Employee Self Service functionality enables staff to view accrued leave and request holidays with the click of a mouse. 

For more information download our Guide to Implementing a Time and Attendance System. Alternatively feel free to call +61 2 8762 7888 or email sales@mitrefinch.com.au to discuss in more detail. 

 Read the full article on Payroll News: http://www.austpayroll.com.au/announcements/employer-fined-for-underpaying-200-staff