Harnessing the power of risk management and compliance for your business
$66,600 penalties per contravention - eliminating risk through award compliance.
Background
This organisation of around 15 employees had not reviewed their pay rates and the managers responsible for compensating their employees were not familiar with the necessary award regulations. They believed they were paying their people accurately.
Why was this a problem?
Our investigation uncovered that 7 of the 15 employees were receiving an hourly wage below the minimum required by law. This is a violation of the legislation which could result in penalties and could have dire consequences for the company's reputation, recruitment efforts, and employee retention.
What we did
- We confirmed each employee’s award classification and checked their actual rate against the award rate for their classification level
- It was established that 7 of the 15 employees were paid an hourly rate less than the minimum award rate
- Employee pay rates were not being updated with annual award rate increases and as employee progressed through pay points the rates were not adjusted as required
- We provided the organisation with the correct minimum rates for the 7 employees and a method for the finance person to calculate back pay
- We drafted a letter to provide to the 7 employees
- We coached and trained the manager along the way so they could do it themselves going forward – e.g. where to find the awards applicable to their organisation, how to determine paypoint progression, how to assign correct classifications and rates and general knowledge on awards and their application
Result
The potential penalties for contravening Fair Work obligations are up to $13,320 per contravention for an individual and $66,600 per contravention for a company.
This project eliminated the risk of penalties and ensured the organisation was meeting its compliance obligations and mitigated the risk to their brand and risk to employee retention.
This project eliminated the risk of penalties and ensured the organisation was meeting its compliance obligations and mitigated the risk to their brand and risk to employee retention.
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