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Payroll industry body reveals 7 pay rules that employers often break

  • Written by: Media Release

CEO and payroll expert Tracy Angwin at Australian Payroll AssociationAustralia’s leading network in payroll training, consulting and advisory for employers – has drawn on her experience in the industry to reveal the eight rules surrounding employee pay and entitlements that employers commonly break.

 

Tracy says: “Employee-related Federal and State-based legislation, as well as employee awards – change regularly. Therefore, companies need to be aware of their legal obligations to enable them to protect both their organisation and their employees.

 

“Many employers get caught in the trap of doing what has always been done in the past, without tracking legislative changes that could impact their employees and their organisation, and implementing those changes. This is what it is vital to have a well-trained and qualified payroll expert in your organisation, as well as external payroll consultants who can to ensure employee pay and entitlements are calculated correctly.”

The Australian Payroll Association reveals 7 rules commonly broken around employee pay and entitlements:

  1. Employers must pay employees for team meetings and training outside of work hours. These meetings and training are considered to be time worked and must be taken into account when calculating an employees’ pay. Companies with employees on wages must pay their employees for this time – in cash, and not ‘in kind’. Time in lieu can be offered as compensation for overtime hours worked if that employee award/agreement allows it. From March 2020, 22 awards will have clauses inserted to require the tracking of hours for salaried employees to ensure that employees are not earning below the minimum wage on a pro rata basis.

  2. Employers must pay an employee who resigns the full notice period if they request the employee leaves early. If the employee refuses to work their full notice period and leaves early, employers do not need to pay any notice period. Under many awards, an employer may be able to deduct up to one week’s wages from an employee’s final pay if they refuse to work their full notice period. Under these awards, the one week cannot be deducted from leave entitlements.

 

  1. Employers cannot pay junior or trainee employees a ‘trainee rate’.If you are paying employees apprentice or trainee rates, you are required by law to have a registered training contract in place and lodged with the relevant authorities. Tracy says employers cannot pay these rates just because the employee is young and learning on the job.

 

  1. Compassionate leave is not limited to two days a year.According to the Fair Work Ombudsman, compassionate leave can be taken when an employee’s immediate family member or household member dies, or suffers from a life-threatening injury or illness. An employee can take two days off on each occasion this occurs – it is not limited to two days every calendar year.

 

  1. Leave balances aren’t required to be provided on payslips. It is not a requirement for sick leave and annual leave balances to be included on an employee’s payslip. However, if an employee requests it, the employer must provide this information.

 

  1. Employers’ tax, insurance and leave obligations for ‘contractors’ might need to be the same as for employees. When an individual contracts to an organisation under an Australian Business Number (ABN), they cannot be automatically classified as an independent contractor. If the contractor provides labour in the same way as an employee, employers still have to meet minimum pay requirements for these workers, and might need to include their payments in their payroll tax and PAYG obligations. The contractor might also be entitled to superannuation, annual leave and sick leave benefits.

 

  1. Lengthy unpaid work trials and unpaid internships not allowed if the employee does ‘productive work’. Unpaid work trials and shifts should only last for the duration needed to demonstrate the skills required for the job. Depending on the nature of the work, this can range from one hour to one shift. Internships and unpaid work placements can lawfully be unpaid only when they are part of approved job training, work experience or vocational placement. In other words, if a trainee or intern carries out work that contributes to the company’s deliverables and outcomes (classified as ‘productive work’) they need to be paid the minimum wage, and usually classified as a casual with a casual loading.

 

About Australian Payroll Association

Australian Payroll Association is Australia’s leading network in payroll training, consulting and advisory for employers. It offers end-to-end payroll process reviews, compliance auditing, specialist recruitment services, payroll qualifications and training courses, and a membership program. Established in 2010, Australian Payroll Association offers the only nationally accredited payroll qualifications at Certificate IV and Diploma level through its registered training organisation, Australian Payroll Institute. It also holds annual events including its national conference and end of year seminars, in addition to releasing an annual Payroll Benchmarking Report. It also has a regular digital podcast series called ‘Talking Payroll’. For more information, visit austpayroll.com.au.

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