The Fair Work Ombudsman has revealed that in 2021-2022 more than $532 million in unpaid wages and entitlements were recovered for more than 384,000 pointing to complacency, ineffective governance and lack of investment in self auditing being the primary drivers in a warning to all employers.
In announcing the massive underpayments Fair Work Ombudsman Sandra Parker highlighted the fact that not only was this amount more than three times higher than the $148 million recovered in 2020-2021, which had been the previous record, but also that a staggering $279 million of the identified underpayments came from large corporate businesses.
“We still believe it is CEOs and boards that must be taking the lead in setting a culture of compliance in their companies”, explained the FWO spokesperson.
The number of large corporate underpayment is likely to grow further with another 50 investigations underway currently.
The FWO have identified a lack of effective governance, inadequate, infrequent or non-existent external payroll auditing and general complacency as the key drivers for underpayments.
“Mistakes happen. This is a reality that all businesses, large and small need to understand and plan for. There is no option to sit back and think that because there has not been a complaint or a case that the payroll is ‘all good’. Issues with initial set up, issues with status and hours drift, issues with changes to rates and classifications can all result in unintended underpayments that quickly pile up”, explains ACAPMA’s Elisha Radwanowski.
“Knowing that mistakes happen all businesses need to ensure that their systems, including their review systems recognise this fact and go looking for those mistakes, rather than simply letting things ‘tick along’ where mistakes compound over time.
“The FWO has placed all businesses on notice that they need to be pro-active in ensuring there are no mistakes in their systems. ‘I didn’t know’ is not a reasonable excuse for breaches…it is the job of all employers to understand the requirements, understand that systems have failure points and mistakes are made and then ensure that they are reviewing their systems and their outputs to ensure they are compliant. Any business failing to do this will face the full force of the FWO”, concluded Elisha.
ACAPMA Members are reminded that they can access detailed Assisted Compliance Audits where employment professionals with industry specific experience review systems and outputs and actively work with the business to identify and correct any issues with template and customised documents, resources and support. For more on the ACAPMA Assisted Compliance Audits, see; https://acapma.com.au/our-services/compliance-and-auditing/ or email employment@acapma.com.au.
Here to help
ACAPMA members are reminded that ACAPMA has a series of resources from Quick Reference Guides to template letters and investigation and reporting checklists that can assist with ensuring compliant and consistent responses in this area, and can call on the advice and support of the ACAPMA Employment Professionals via employment@acapma.com.au.
HR Highlights are things to consider, implement and watch out for in your business.
They are provided as general advice and you should seek further advice on your situation by emailing employment@acapma.com.au, it’s free for members.
ACAPMA Membership is affordable at only $810 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Click here to learn more about ACAPMA Membership.
Elisha Radwanowski BCom (HRM&IR)
Executive Manager Employment and Training
ACAPMA
