Do you know your employee pay obligations?

In light of the recent developments with Woolworths’ underpayments, expected to cost up to $300 million, workplace relations firm Employsure encourages both small and large businesses to do better when it comes to employee pay and entitlements.

Managing director, Ed Mallett, says it’s evident that businesses are struggling to navigate the minefield that is employment relations―Fair Work Ombudsman’s annual report revealed more than $40 million was recovered in underpayments.

“If a business on the scale of Woolworths’ size with access to resources, as well as unions to keep it accountable, has made an error, how can regulators expect small businesses to get it right?” he asks.

“The root of the problem is therefore in the legislation―not all employers should be branded as ‘wage thieves’. Often, they make simple, honest mistakes because the system is far too complex.”

Unlike larger companies, SMEs don’t have access to the expertise and resources needed to navigate the complexities of the Fair Work Act. However, more than 97 per cent of businesses are small businesses which employ over 5.5 million people.

“The small business owner invariably handles all operational and legislative requirements, which include administration workplace relations obligations. They are not HR or legal experts and do not have HR departments, legal departments or finance departments. Put simply, the workplace relations system is too complex and time consuming for Australian businesses.”

According to research by Employsure in 2017-18, only one in three small business employers are confident they are compliant with the Fair Work Act. Further, one in five admit they know very little or nothing at all about the Fair Work Act and one in four said they found it difficult to calculate the correct pay, entitlements, and interpret the Modern Awards for their business. In addition, only 10 per cent of managers said they were confident they understood the Fair Work Act.

“There has been a growing need to reform the system for small businesses that find themselves caught in the web of complexity that is expensive, time-consuming, and poorly explained by regulators,” adds Mallett.

“Our views are that government should make practical and realistic reforms that attempt to make it simpler for businesses to do the right thing and build their confidence to employ, which is what the economy needs.”