The Fair Work Ombudsman has released a report detailing its findings to date in its running campaign testing employers’ compliance with basic obligations including minimum pay, record-keeping and pay slips.
Alarmingly, the FWO has found that 48% of the 1,217 businesses audited are non-compliant with their obligations. In the vast majority of cases, the reason provided by employers for non-compliance was a lack of awareness of their workplace obligations to their employees.
Other reasons included misinterpretation of award requirements, incorrect calculation of flat hourly rates and failing to apply the annual July wage increase. The least compliant industry was hospitality in which 61% of businesses audited were found to be non-compliant.
The majority of employers found to be in breach of their obligations were issued with contravention letters, with others receiving formal cautions, infringement notices and compliance notices. One employer entered into an Enforceable Undertaking and eight employers remain under investigation for serious non-compliance. So far, the FWO has recovered $1,326,125 for underpaid employees from almost 300 businesses.
The campaign is ongoing and the FWO has clearly stated that lack of awareness “…is not a valid reason for non-compliance in the workplace”.
Lessons for employers
- With the increased attention on award compliance and underpayment claims by employees, now is the time to ensure you are meeting your workplace obligations
- Review your agreements with employees and audit against minimum award entitlements
- Ensure your record-keeping processes are adequate and capture the right information- both for compliance purposes and in order to defend an underpayment claim if required