04 Jun FEDERAL BUDGET – FAIR WORK OMBUDSMAN INCREASED FUNDING

In this year’s Federal Budget, the Fair Work Ombudsman has won $28 million over the next four years to continue to pursue underpayments by large corporate employers.  Specifically, the Ombudsman’s workforce has been boosted from 16 to 970, to improve the Ombudsman’s ability to pursue underpayments and respond to self-reported non-compliance with the Fair Work Act 2009 (Cth) (“FW Act”) by large corporate employers.

There has been a significant increase in identified underpayments across Australia. “Self-reporting” to the Ombudsman has now become the most significant method of notification to the Ombudsman. Given the auxiliary liability provisions of the FW Act (section 550), boards and senior management are identifying and self-disclosing these underpayments. Employers should be aware that the largest sources of underpayments are:

• Salary: where the “salary” paid to an employee does not provide the same overall entitlement to the employee that they would have received under the relevant modern award; and

• Rostering rules: rostering rules that do not recognise the entitlements under the relevant modern award.  This includes, for example, working outside of ordinary hours.

What we recommend

There is no question that the Ombudsman is and will continue to pursue employer breaches of modern awards (regardless of intent).  Hence why at minimum, HR Law recommends six monthly random spot audits of payments made to employees versus what that employee would receive for the same work under the relevant modern award.  Specifically, we recommend a wage audit and reconciliation be undertaken across all employees to ensure:

• they are classified under the correct modern award, noting this is a factual question (do they fall within the industry specific or occupational specific modern award);

• they are advised of, and are correctly classified under the relevant modern award; and

• they are paid the correct minimum rate of pay for that modern award and classification level, as well as any other modern award entitlements such as overtime, penalties, loadings and allowances.

How can HR Law help?

HR Law can assist with wage and reconciliation calculations.  Contact HR Law today on 07 3211 3350 for a fee estimate.

The content of this newsletter is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.