Even Retail Giants Can Get It Wrong - Don’t Get Caught Out With Costly Staff Underpayments

Retail giant Wesfarmers is the latest in a string of Australian businesses to reveal it has underpaid employees at its Target stores by more than $9 million, adding to close to $15 million in underpayments at some of its other brands such as Bunnings and Coles. Following its underpayment announcement late last year, Woolworths has also increased its estimated staff underpayments to $315 million and reports that the final amount could still be higher.

Do you have employment contracts or individual flexibility agreements in place with your staff? If so, when was the last time they were reviewed? All employers must ensure they correctly interpret Awards and/​or Enterprise Agreements, including whether they are applying the applicable loadings and/​or penalties. Paying the correct rate of pay is a legal requirement, and with so many different Awards, interpretations and rates of pay, the South Australian Business Chamber wants to help you make sure you get it right.

When the Fair Work Commission issues determinations regarding Modern Awards, you need to ensure you’re across those changes and apply them to any Awards your employees are covered by. Award provisions may surpass those of the employment contract or IFA resulting in your employees no longer being better off, and therefore being unintentionally underpaid.

Let’s face facts — if a major retailers unintentionally get it wrong — there is a risk for any business of any size to also get it wrong. The longer an underpayment goes undetected, the more difficult and expensive it becomes to rectify when discovered. There can also be implications for superannuation, payroll tax and workers compensation premiums.

One of the best ways to check whether you’re paying your staff correctly is to have specialist independent experts such as the South Australian Business Chamber undertake an audit of your payroll.

If your employment contracts or IFAs have been in place for more than one year, the South Australian Business Chamber also recommends you review the arrangement to ensure:

• it still meets your needs
• the employee is still better off under the employment contract or IFA than they would otherwise be
• the employment contract or IFA is still compliant with the Award

Are you confident that you have it right? If not contact one of our Workplace Consultants today on 8300 0000 (select option 1) or click here to register your enquiry.

Not a the South Australian Business Chamber member? Click here to find out how the South Australian Business Chamber can help your business.