Keeping up with compliance obligations is one of the key pain points employers face, especially when there is such frequent change as we’ve seen with the recent review of Modern Awards, changes to casual definitions, introduction of annualised wage agreements into more Awards, the constant analysis of Contractors v’s Employees and consistent Superannuation increases. It’s no wonder it feels overwhelming for employers, especially small businesses who don’t have in house HR expertise keeping abreast of the changing industrial relations landscape for them.
So, I guess it comes as no surprise that many business owners stick their head in the sand when it comes to HR compliance, and hope that they manage to get by, flying under the radar from attention from the Fair Work Commission.
But sticking your head in the sand is literally the worst thing you can do, in fact doing that could cost you dearly. With infringement notices starting at up to $ 1 332 per individual and up to $6 660 for a corporation (per breach) the costs of failing to be compliant could literally ruin a business.
The good news is it really isn’t too hard to get the compliance essentials right, there are a handful of things you absolutely need to get right, here is an overview:
Payslips and Record Keeping
When it comes to paying employees and keeping appropriate records, this is fundamental, and something that most business owners know they need to do, but do you know the nuances and details?
For example, payslips must be provided within 1 day of the employees pay being processed, and payslips must include specific details and information including:
If you have staff covered under Annual Salaries where there is an Award with this clause included, pay extra attention to the hours and breaks record keeping, as this is also a compliance requirement.
In addition you need to retain all employee records, including full information about their employment, leave, commencement, termination, hours, deductions, remuneration and other key details for at least 7 years.
Payslips and record keeping are something that the Fair Work Commission take seriously and will issue infringement notices for employers who don’t comply.
The National Employment Standards
These are the foundation pieces of our Industrial Relations system, the 11 minimum entitlements and protections which apply to every employee who is covered by the Fair Work Act.
The National Employment Standards (NES) cover things like maximum weekly hours – which by the way is 38 hours per week (not 40, 42 or more). As well as things like leave entitlements, workplace flexibility, casual conversion, Public Holidays and termination and redundancy.
If you employ staff who are covered under the Fair Work Act, it is highly likely that many, if not most, of these employees will be covered by one of more of the 120 + Modern Awards.
Modern Awards are effectively legal documents which outline the minimum terms of employment, including pay rates and other conditions, of employees who are deemed to be covered by them. They are structured in accordance with core industries and key occupations and were put in place in an attempt to simplify things under a National Industrial Relations framework which was a shift away from the old State and Territory based paradigm.
With the exception of situations where your organisation is covered by an approved Enterprise Agreement., and the rare instances of Award Free employees, it’s entirely likely that your staff are covered by an Award, and you therefore as the employer have an obligation to comply with the conditions of the Award, even if you pay well in excess of the minimum rates of pay detailed within them.
It is also likely that you may have different staff covered by different Awards, with it not being unusual for there to multiple Awards applying in any one workplace. This can certainly make things complicated from a compliance perspective, so it’s important to understand which Award applies.
This is potentially one of the most litigious areas of compliance, with unfair dismissal claims one of the most common issues the Fair Work Commission deals with. If you want or need to end an employment relationship with one of your employees, it’s critical that you take a close look at your compliance requirements.
This is a case-by-case situation, with things like whether you are a small business (14 or fewer employees), you’re terminating based on performance, you are genuinely making the role redundant, what the Modern Award says about how you need to go about this and what is detailed in the Employment Agreement or Contract.
It is often important to get expert advice if you are unsure how to exit someone in a compliant way, Unfair Dismissal claims are easy for employees to make, time consuming for an employer to deal with and in a majority of cases result in a payout being made to the ex-employee which could have easily been avoided.
Keeping up with compliance is an essential part of employing staff in your business. These are just some of the key areas of compliance, and by no means an exhaustive list of compliance requirements, so be sure to reach out for assistance, or do your research to make sure your business is protected.
Remember though, sticking your head in the sand is the worst thing you can do.
Another way you can stay up to date with the latest compliance updates is to join us inside our free Facebook Group. Each week I am proving free training and updates in the group, so you’ll be alerted any time there is something new. Plus, it’s a great place to connect with other business owners, leaders and managers in a group focused on all things HR, people and team management we’d love for you to join us.