Pay rate penalties – reduce the risk

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Encouraging your employees to make themselves aware of their entitlements could help your company to ensure it complies with employment laws.

Following recent action by the Fair Work Ombudsman, workers in Perth have received back-payments totalling $65,900. The largest back-payment by a company was $24,400, for 14 workers who were underpaid wages and weekend rates in 2011 and 2012.

According to Fair Work Ombudsman Group Manager, Michael Campbell, a common cause behind underpayments is employers’ lack of awareness of the minimum pay rates and award entitlements. He said that in all of the recent cases, employees were reimbursed without the need for further action.

As well as risking large back-payments, companies that underpay their workers can face penalties and fines for breach of legislation. Making mistakes – even accidentally – can also lead to bad publicity. But when liabilities are pointed out, they can be addressed.

That employers usually reimburse their workers when they learn that they have been underpaid suggests that, as employers, they generally act in good faith. Creating an environment where employees are encouraged to look into their entitlements, and where they feel able to say when they think something is amiss, could help your company to avoid penalties.

Ultimately, it is up to employers to ensure employees are paid correctly.

 “Employers need to be aware that, under workplace laws, it is their responsibility to ensure they pay employees their full lawful entitlements,” Campbell says. “Our message to employers is if you take the time to get the basics rights, everything else will start to fall into place.”

Employers, and employees, seeking more information about employees’ entitlements can visit the Fair Work Ombudsman’s website: www.fairwork.gov.au.

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