The Overtime Issue with Payroll Compliance

Large scale underpayments are continuing to occur throughout all different types of businesses across Australia, many of which are caused by complications with overtime payments. Emirates Retail Leisure is one of the more recent, high profile cases of staff underpayments. The airport restaurant and retail operator has already back-paid $5 million in unpaid wages, stemming from incorrectly classifying employees, not complying with rostering requirements, and underpaying overtime rates. 

Paying employees the correct overtime rates or identifying what parts of shifts fall into overtime can be tricky for businesses, especially when there are part time, full time, and casual employees all working together. Paying salaried employees overtime is another area where businesses often get themselves into trouble. Businesses can tend to ‘set-and-forget’ salaries, assuming that it covers extra overtime, or other, payments.

Overtime isn’t always a cut and dry subject within the workplace. Awards and Agreements can be quite complex, with many different conditions that can trigger overtime loadings. As a result, many businesses are often unaware that an employee is actually working an overtime shift. A common occurrence in workplaces, especially at fast food and restaurant businesses is to ask employees to stay back an hour or two and pay them without adding on the extra loading.

To combat the overtime issues, the FWO recommends that businesses should conduct regular reviews of their payroll to minimise the risk of a large-scale underpayment. Whilst payroll audits might be the first solution that comes to mind for businesses, there are more comprehensive solutions available. WageSafe continuously analyses your payroll in real time to identify where underpayments are happening, instead of looking at what has already happened months, if not years, ago. Making sure you are staying on top of the latest in payroll compliance is also important to the safety of your business, and the WageSafe newsletter can assist you in that.

Apr 7, 2022

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