Why a ‘set-and-forget’ mindset is costing businesses

The FWO has once again warned employers of having a ‘set-and-forget’ mindset when it comes to paying their employees.

This comes after the FWO claimed that Coles were $100M short in their allowance for back-paying employees who were underpaid. These underpayments, which spanned from 2017 to March 2020, were primarily found in managers who worked an average of one hour beyond their rostered shifts. The FWO alleged that Coles assumed the salaries of these employees would cover any overtime and therefore didn’t bother to record or calculate any overtime. In relation to these underpayments, the Fair Work Ombudsman, Sandra Parker, said, “Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers.”

Coles’ alleged ‘set-and-forget’ approach to paying their employees may have also been present in their record keeping, the FWO claimed. The FWO alleged that overtime, penalty rates and other entitlements were underpaid, despite employees being paid a salary which was meant to cover these entitlements.

Under the provisions of the ‘Protecting Vulnerable Workers’ amendments to the Fair Work Act, there is a reverse onus, in that where the appropriate records have not been kept, then the employer must disprove allegations of underpayment relating to entitlements such as overtime. In Coles’ case, their alleged lack of documentation could mean that they are unable to disprove the FWO’s allegations.

Multiple Costs That Arise From Underpayments

On top of the back-payments, as well as the cost of calculating the amount of the underpayments, Coles may also be fined if the FWO gets its way, in seeking penalties for breaches of Australian workplace laws. This demonstrates the financial impact that underpaying your employees can have on your business.

However, the repercussions won’t stop there. Media coverage of underpayments can damage a company’s brand considerably, too. Read more about the consequences of underpaying your employees here.

Get Protected by WageSafe

WageSafe is a ‘set-and-forget’ solution in that employers truly don’t have to worry about underpaying their employees. With WageSafe, your actual payroll will be automatically and continuously checked against our calculations of entitlements, making any underpayments immediately evident and able to be fixed quickly, often in the same payment period.

WageSafe is the perfect payroll compliance solution that is truly ‘set-and-forget’. Book in for a free, live demo now. Just click here!

Dec 7, 2021

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