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David Eaton

It pays to keep on top of wages

Celebrity chefs and national convenience store franchises have done much in the past few months to throw the issue of staff wages and underpayments into the national spotlight.

The Federal Government’s subsequent announcement of plans to criminalise wage theft seems a logical response on the surface. The detail, however, has left many small business owners fearing it may unfairly target those who make honest mistakes in trying to adhere to a complex award system.

The starting point for small businesses in WA that employ staff is to know which industrial relations system they fall under, whether it’s the state system or the national system.

Generally, the national system applies to incorporated business – those with ‘Pty Ltd’ or ‘Ltd’ in their name – while the state system applies to sole traders, unincorporated partnerships and some trusts.

You can avoid costly mistakes by understanding the applicable pay and employment obligations. If your business belongs under the national system, the Fair Work Ombudsman can provide assistance and information to meet your employer obligations. In the state system, contact Wageline for assistance.

While deliberate wage theft should be exposed, a complex awards system can lead to genuine mistakes.

The SBDC supports the Australian Small Business and Family Enterprise Ombudsman, who has called for laws and regulations governing pay and conditions to be simplified as part of a sweeping review of the nation’s industrial relations system.

Even large organisations with access to human resources teams have made well publicised mistakes. For small businesses, it is not necessarily employees’ hourly rates that catch out employers, but the multitude of start times, break times and the amount of penalty rates that also have to be calculated.

When you factor in superannuation, tax, employment conditions and record keeping demands, small businesses with any doubts about their obligations are advised to seek advice.

For more information and free guidance, read through the I need business advice section of our website or call us on 13 12 49 to speak to one of our experience business advisers.

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