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

Confident that your staff are being paid correctly?

Maybe it's time you checked your payroll reports as yet another company has been caught out for allegedly underpaying it's employees.

This time, the operator of a Gold Coast pizza shop is being prosecuted by the Fair Work Ombudsman for allegedly underpaying 27 employees almost $20,000.

The employees in question were aged from 20 to 37 and several are from non-English-speaking backgrounds, employed as cooks, kitchen-hands, customer service attendants and delivery drivers.

The workers were allegedly underpaid their minimum hourly rates, overtime rates and weekend penalty rates, with one staff member allegedly underpaid evening work allowances.

It is also alleged that the outlet owner, Mr Murphy, failed to comply with a Notice to Produce documents issued by Fair Work inspectors during their investigation.

Under the Fair Work Act, employers must comply with requests from the FairWork Ombudsman to provide employment records relating to employees and former employees.

Fair Work Ombudsman Nicholas Wilson said the decision to prosecute was made because of the involvement of vulnerable workers and the employer's failure to rectify the matter.

Read the full article online at Payroll News

How can you safeguard your organisation from a potential Fair Work investigation?

Ensuring that you are compliant with different pay scales, penalty rates and modern awards can represent a major headache for many organisations, with other recent workplace cases such as Toys 'R' Us, highlighting the importance of effective Award Interpretation and Time Management processes.

An automated Employee Time Management System takes the stress out of employee allowances and entitlement calculations via an in-built, fully customisable Award Interpreter.

Easily calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.

Reports and Employment Records can also be generated quickly and easily should you be asked to produce them as evidence by the Fair Work Ombudsman.

If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au

Allegations of underpayment and lack of adequate employment records see Auto Service Provider in hot water

Ultra Tune, an auto service provider, is facing legal proceedings over allegedly underpaying an employee by more than $20,000.

It is also alleged to have breached workplace laws by failing to keep correct employment records for a further 10 Filipino workers it had brought to work in Australia on 457 visas.

According to court documents, Ultra Tune recruited and sponsored the employee on a 457 visa to work at their Warwick outlet in regional Queensland.

However, the company allegedly paid the worker a flat hourly rate of $15.34, rather than the minimum hourly rate, and did not pay overtime.

Fair Work inspectors were made aware of the allegations after receiving a complaint from the man following the termination of his employment when the Warwick outlet closed.

No attempts were made to employ him at another outlet and the Fair Work Ombudsman (FWO) claims Ultra Tune failed to pay wages in lieu of notice, redundancy and accrued annual leave entitlements.

The company has since been ordered to pay the man $11,000 of the payable entitlements they allegedly attempted to evade.

The FWO said Ultra Tune’s inadequate documentation hampered their investigation of up to nine other worker’s pay records.

The company faces multiple charges, with maximum penalties of up to $33,000 per breach.

Read the full article on HC Online here: http://www.hcamag.com/newsletter/content/117104/

How an automated Time and Attendance can help you avoid making a similar mistake...

One of the primary reasons why companies invest in a Time and Attendance Solution is to automate the capture and management of all employees’ clocking in and out times and attendance information.

This automatic capture ensures that organisation are complying with all federal and state workplace legislation, such as employee entitlements and modern awards, without having to manage mountains of administrative paperwork.

A customised scheduling function also allows businesses to separate work groups that are on different pay scales. Weekly, bi-weekly or monthly schedules can also be based on pre-defined budgets to keep payroll costs as low as possible.

Download our Free Guide on "How to Choose the right Time and Attendance System for your Business".

Alternatively, to find out more about Mitrefinch’s Time and Attendance Solutions, please visit us online or call +61 2 8762 7888 today.

Aussie cleaners share in back pay pay out - how can you safeguard your business from an underpayment case?

Hundreds of cleaners across Australia are sharing in a $242,000 pay out after investigations by the Fair Work Ombudsman found they were being underpaid, reports the Canberra Times.

A total of 621 cleaners in Australia were rewarded back pay after Fair Work investigators looked into 315 companies as part of a nationwide campaign.

Of those 315 companies, 117 were found to have breached workplace law, with the most common breaches being underpayment of penalty rates and inadequate record-keeping practices.

United Voice branch secretary, Lyndal Ryan commended Fair Work Australia but said the issue went beyond the 11 employees.

''The problem of underpayment is probably not reflected in the figures because it is more widespread,'' she said.

Fair Work Ombudsman Nicholas Wilson advised that they were alerted to a potential issue within cleaning services when records between March 2006 and April 2010 showed it was generating the fourth-highest number of complaints.

So how can you safeguard your organisation from a potential underpayment case?

Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, with recent workplace cases such as Toys 'R' Us having to pay back up to $1 million to more than 1000 young employees, highlighting the importance of effective Award Interpretation and Time Management processes.

An automated Time and Attendance System can take the stress out of employee allowances and entitlement calculations via an in-built, fully customisable Award Interpreter.

Easily calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.

Visit our website to find out more about effective Award Interpretation and automated Time and Attendance Systems or feel free to call us on 1300 884 831 (Aus) or 09 363 9557 (NZ).

Follow us on Twitter and Facebook, or join our Linkedin group for updates on employee time management solutions.

Can you afford not to?

Fair Work Ombudsman awards Wollongong truck driver $11,500

Payroll News reports that a truck driver in Wollongong has been back-paid $11,500 following an investigation from the Fair Work Ombudsman.

Following a complaint lodged by the employee, Fair Work inspectors contacted the driver’s employer to clarify its obligations. The driver was subsequently back-paid three weeks’ sick leave and termination pay.

Fair Work Ombudsman Executive Director, Michael Campbell, advised, “We have a flexible, fair approach and our preference is always to work with employers to help them resolve any non-compliance issues we identify.”.

He added that the Agency places a strong focus on educating and assisting employers to understand and comply with workplace laws.

The business in question has now put processes in place to ensure the mistake is not repeated.

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.

These guides cover work and family, consultation and co-operation, individual flexibility arrangements, employing young workers, gender pay equity, small business, workplace privacy, managing underperformance, effective dispute resolution, parental leave and improving workplace productivity in bargaining.

Businesses can also benefit from implementing an automated Employee Time Management System, which records employee attendance as well as automatically calculating specific pay scales, modern awards, pay penalties and overtime rates. This information is then uploaded directly to the organisation’s payroll system – enhancing 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 Mitrefinch’s Free Guide to Implementing a Time and Attendance System. Alternatively feel free to call 1300 884 831 or email sales@mitrefinch.com.au to discuss in more detail.

Read the full article on Payroll News: http://www.payrollnews.com.au/AnnouncementRetrieve.aspx?ID=50565

Sham Contracts still rife with two companies set to face court next month

Some companies still aren't getting the message, with two call centre service providers set to face court after the Fair Work Ombudsman accused them of breaking "sham contracting" guidelines.

The organisations in question are being accused of breaching a number of workplace laws, by employing 10,000 call centre workers and door-to-door sales people as contractors, resulting in "massive underpayments".

The Ombudsman defines sham contracting as an employer disguising or misrepresenting an employment relationship as an independent contracting arrangement, thereby avoiding employee entitlements such as minimum pay rates and leave entitlements.

Speaking at the Australian Industry Group's workplace conference earlier this week, Fair Work Ombudsman Nicholas Wilson, stressed that while hiring independent contractors is not illegal, if an organisation sets out to evade their workplace relations responsibilities, by using commercial processes to find a business partner who will undercut established minimum wage rates, then that may be considered unlawful.

"The pretence that commercial negotiations can procure below award wages or that the cover of an ABN can avoid an employment arrangement are merely that – pretences. And they are pretences that can have significant consequences," he added.

In March, the Ombudsman warned that it would be cracking down on sham contracting in the health and beauty, cleaning, and call centre industries.

That same month, a Brisbane call centre company and its director were fined $214,500 for sham contracting and underpayments while the Construction, Forestry, Mining and Energy Union also threatened industrial action against developers and builders that engage staff as ''sham contractors'', which is believed to account for up to 168,000 workers (See Blog Post: Employers shirk Employee Obligations).

Read the full story: http://www.smartcompany.com.au/industrial-relations/20110503-fair-work-ombudsman-claims-two-companies-labelled-10-000-workers-as-sham-contractors.html

Avoid your business being branded a sham

Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, but you don't need to evade the law to avoid the stresses of Award Interpretation and Employee Time Management processes.

An effective Employee Time Management System can do all the hard work for you via an in-built, fully customisable Award Interpreter.

Calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.

If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management download our Free Guide on How to Choose a Time and Attendance System.

Alternatively feel free to contact Mitrefinch today on 1300 884 831 or email sales@mitrefinch.com.au

Employers shirk employee obligations with Sham Contracts

As per an article in the latest online edition of the HR Leader, a Brisbane call centre has been ordered to pay a total of $214,500 after being found guilty of underpaying its staff by using “sham contracts”.

Contracting Plus Pty Ltd was found guilty of violating workplace laws by paying its workers less than the minimum hourly rate of pay, amounting to $46,000.

The former Brisbane CBD call centre attempted to classify workers as “independent contractors” rather than employees, and therefore avoided mandatory requirements relating to salary and benefits.

At the ruling, Federal Magistrate Michael Burnett said that, “Sham contracting is a serious matter because if workers are incorrectly classified as independent contractors, they can miss out on fundamental entitlements such as minimum pay rates, penalty rates and annual leave.”

Burnett ordered that the fines should go towards reimbursing the employees of Contracting Plus Pty Ltd, a large number of whom were under the age of 21.

“To purposely deny vulnerable and low-skilled workers these important employment entitlements by disguising them as contractors is particularly reprehensible,” he added. “As such, it is important that my agency mark its disapproval of such behaviour and deter others from doing the same.”

Michael Campbell, Fair Work Ombudsman Executive Director, praised the decision, advising that it sent out a very clear warning to other would-be employers looking to evade workplace legislation and their obligations to employees.

The HR Leader reports that the trend of so-called sham contracting appears to have spread into several sectors, with a recent investigation led by the Construction, Forestry, Mining and Energy Union (CFMEU) halting hundreds of illegal contracts at construction sites across Australia. Nationwide audits look set to continue, with well-known multi-nationals such as Bovis Lend Lease and Multiplex construction being questioned by the CFMEU.

Construction workers have teamed up with the union to create the ‘Stop the Sham’ campaign, in an effort to voice their anger against the growing practice of sham-contracting. They are also calling for co-ordinated Federal Government action.

CFMEU Construction National Secretary Dave Noonan said that he blamed authorities for turning a blind eye to the practice, and as well as treating workers unfairly, the organisations responsible were also evading business taxes.

“These companies are taking lucrative Federal Government construction contracts with one hand, and undermining Australia’s tax base with the other,” he said.

To read the full article see: http://www.humanresourcesmagazine.com.au/articles/27/0C06F927.asp

There is an easier way to comply with penalty rates and workplace legislation without resorting to Sham Contracts

Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, but you don't need to evade the law to elevate the stress of effective Award Interpretation and Time Management processes.

Mitrefinch's Employee Time Management System (TMS) can do all the hard work for you via an in-built, fully customisable Award Interpreter.

Calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.

If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au

You can't afford not to.

(Source: HR Leader)

Toys 'R' Us ordered to pay back up to $1 million to more than 1000 young employees

In one of the biggest cases of underpayment uncovered by the Fair Work Ombudsman, Australia’s largest toy retailer was found to have underpaid more than 1000 young employees a total of almost $1 million.

Illustrating the importance of effective award interpretation, the investigation found that Toys 'R' Us staff in stores across a number of states had been underpaid their minimum hourly rates and shift penalty rates between 2007 and 2009.

Fair Work Ombudsman Executive Director, Michael Campbell, said the scale of the underpayments was one of the largest his team had encountered.

"An extraordinary number of young and vulnerable employees were underpaid a large amount of money. We accept the contraventions were inadvertent and not deliberate," he said. It was reported that one employee was just 14 years old.

The investigation resulted in an enforceable deal with the company, ending the need for any further prosecution. Toys 'R' Us has been ordered to pay back all employees what they are owed and as part of the deal.

Toys 'R' Us has also agreed to donate $300,000 towards the cost of educating and training young workers and protecting their rights at work.

The settlement with the Fair Work Ombudsman also saw the toy giant agree to:
• SET UP a whistleblower hotline for its staff
• APOLOGISE in writing to all current and past employees;
• APPOINT external professional service providers to audit its pay and conditions, record-keeping and staff complaint procedures within three months and again within 18 months;
• SEND its payroll and/or human resources staff to accredited training courses for the next three years;
• ENSURE compliance with federal workplace relations laws and co-operate with the Fair Work Ombudsman in any future investigations; and
• POST a copy of the agreement and a signed copy of its letter of apology on its website.

In a letter to staff, Toys 'R' Us expressed its "sincere regret" and said the underpayments were a result of "inadequate processes".

A Toys 'R' Us spokeswoman advised that all employees affected by the pay discrepancies had received "complete restitution", and pledged it would not happen again.

So how can you safeguard your organisation from potential underpayment cases?

Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, with recent workplace cases such as Toys 'R' Us and South Australia's Irvine Transport, highlighting the importance of effective Award Interpretation and Time Management processes.

Mitrefinch's Employee Time Management System (TMS) takes the stress out of employee allowances and entitlement calculations via an in-built, fully customisable Award Interpreter.

Easily calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.

If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au

You can't afford not to.

(Source: Herald Sun and Payroll News)