The Fair Work Ombudsman is currently making ‘SURPRISE’ audit visits… are you on the FWO’s watch list?
As we emerge post-pandemic and Government support packages for businesses is wound down, there is an increase in Fair Work hearings; some of which are prior to Covid-19.
In recent times, multiple cases have been before Fair Work with rulings impacting business owners; particularly in relation to wage underpayment breaches.
The Fair Work Ombudsman (FWO) is also making surprise visits to businesses – e.g. restaurants, cafés and fast food outlets in Adelaide’s Chinatown precinct and Adelaide Central Market last week. At least 60 businesses faced audits with Fair Work Inspectors checking with business owners, managers and employees whether workers are being paid correctly.
The FWO is acting after receiving intelligence from a range of sources, including requests for assistance via an anonymous reporting website tool and various stakeholders which indicated potential breaches of workplace legislation by some businesses in the area.
Earlier this month, the FWO released its findings as a result of audits targeting popular food precincts in Hobart. More than $580,000 in unpaid wages was recovered for 376 workers.
Are you at risk of a Fair Work audit post-pandemic?
With the FWO again active in pursuing breaches of workplace legislation, the changes to Award wages since July 2020 and media coverage of wage underpayments to name a few; you might be feeling a little confused and potentially exposed to Fair Work through unintended errors.
Let’s recap from our blog in 2020, which outlined the FWO priorities for 2020-2021. These priorities were in addition to FWO providing workplace support throughout the pandemic.
1. Specific Industries under the microscope:
Fast food, restaurants and cafes, horticulture and the harvest trail sectors, franchisors and sham contracting will continue to be a focus of the FWO’s compliance and enforcement activities. This is in addition to dealing with complaints and tip-offs about employers alleged to not comply with their employment obligations.
Fast food, restaurant and café matters accounted for 50 per cent of the Fair Work Ombudsman’s new litigations in 2019-20. The FWO secured court ordered penalties of $1,877,162 from 13 litigation decisions in this sector in that financial year.
Some of these priority sectors have been seriously impacted by the pandemic and are under considerable financial strain. The FWO said they will be mindful of the impact of their regulatory efforts and not set out to negatively affect already struggling industries facing unprecedented challenges from pandemic disruptions.
2. JobKeeper implementation and dispute resolution under the hammer:
Due to the impact of Covid-19, the number of employers and employees seeking Fair Work Commission (FWC) assistance and dispute resolution has grown significantly. The FWC will prioritise JobKeeper allegations and non-compliance cases to support the implementation and operation of the JobKeeper wage subsidy scheme in all workplaces.
The FWC is currently hearing and handing down decisions on disputes regarding JobKeeper at a rapid rate. As an employer, it is vital you understand the provisions under the Fair Work Act 2009 and the parameters of JobKeeper and then have implemented accordingly to avoid any disputes or claims arising from your employees. As noted earlier, many recent claims are being made in retrospective to the pandemic.
3. Wage changes and underpayments still in the spotlight:
The recent high-profile media coverage and court decisions on numerous businesses underpaying staff (especially in the hospitality and retail sectors) has placed wage compliance at the top of many businesses and people’s minds. Wage underpayments are a significant issue of public concern and will continue to be a priority for the FWO in the year ahead.
Several of the underpayments have been by an employer’s own omission with more than 60 self-disclosing their breaches of the relevant Award. These breaches have identified millions owing to employees; apparently from errors in interpreting the intricacies of the relevant Award and/or system errors. Irrespective of the reason, employers and key personnel who are responsible for the day-to-day running of the business are and will continue to be held to account.
The highly publicised underpayments scandals, coupled with the recent award wage increases and recent changes to annualised wage arrangement clauses have placed pressure on businesses to ensure payment of wages and record keeping is accurate and complaint.
What can your business do to avoid problems with FWO?
With the increased scrutiny of business activity and accountability enforcement by the FWO, it is imperative your business has its compliance in check.
There have been many instances where employers experience stressful and challenging dealings with the FWO because the business was not fully aware of their employment obligations. Recent cases have resulted in employers being penalised by the Federal Court:
- $22,050 for failing to comply with a Compliance Notice issued by the Fair Work Ombudsman, requiring them to calculate and back-pay alleged underpayments of a former employee as well as rectify the underpayment plus interest;[1]
- $22,440 penalty against the former owner-operator of a labour-hire company following the underpayment of 80 workers on a Queensland farm;[2] and
- $264,690 in penalties against a former Sydney entrepreneur, his wife and three companies he operated in response to employees being underpaid more than $1 million.[3]
Akyra’s key takeaways
There are serious penalties (up to $12,600 per contravention for an individual; up to $63,000 per contravention for an organisation) if you fail to comply with the Fair Work Commission (FWC) employment law obligations. In several Australian state, owners and directors can face additional fines to those of the FWC plus up to 10 years jail time for wage theft.
With costly implications and potential jail time if you get wages and payroll wrong, it is best to ask for expert advice sooner rather than later.
Akyra can work with your business to assist you are compliant and ensuring wages are paid in accordance with the relevant modern award, enterprise agreement or NES; to ensure your payroll process is compliant and your business is paying the correct wage and not unknowingly underpaying staff.
We can also work with you to develop a communication plan including when the correct rate will be applicable from and when any identified backpay will be processed.
NEED MORE INFORMATION?
Akyra can help your business to assist and support all your questions and concerns related to wage obligations. Please contact Akyra on 07 3204 8830 or book a free 30-minute consultation for an obligation-free conversation.
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.
Sources:
[1] https://www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/july-2020/20200710-old-cop-shop-penalty-media-release
[2] https://www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/july-2020/20200709-mushrooms-penalty-media-release
[3] https://www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/june-2020/20200618-silver-matters-penalty-media-release
