Avoid pay pitfalls or risk being the next 7-Eleven bad news story

Avoid pay pitfalls or risk being the next 7-Eleven bad news story

Payroll problems are bad for business

No matter what the circumstances are behind the scenes at 7-Eleven head office, things don’t look good. 

Whatever the truth behind claims that the franchisor has been involved in systematic wage fraud, the brand damage is done. 

I find it very difficult to see, even with the best crisis management plan, how the company will regain the trust of its customers.

Anything can go wrong in your business, but if you pay your staff incorrectly or not on time, it has the highest likelihood of damaging your employee morale and your business reputation.

In order to avoid being the next 7-Eleven story picked up by the media for all the wrong reasons, employers should get these three basic things right in their payroll.


1. Ensure your employees are on the correct modern award


Modern awards are based on the role of the employee not the industry of the employer.  Some years ago, Victorian brothels were targeted by Fair Work as they were paying their receptionists based on the award applicable to sex workers rather than the relevant clerical workers award.  Based on this the receptionists were being underpaid during hours of work when they should have been paid loadings and penalty rates.


2. Keep attendance records


Whether you roster your staff electronically or on paper, you must keep track of worked hours for every employee.  These must be produced when requested by Fair Work and they will be compared to payments that you have made for the employee. 


3. Ensure your payslips are compliant


Payslips must be given to employees within one day of them being paid, even if they are on leave.  It’s not good enough just to deposit wages into employee bank accounts.  There are strict requirements on what information needs to be on a payslip and these include the period for which the payment is being made, the payment date, the employers name, the gross and net figures, hours worked by rate and details of superannuation payment amounts and the fund that superannuation has been paid into.

Other areas of complexity that you should ensure are correct in your payroll is the accrual and calculation of annual and long service leave payments, superannuation contributions on the correct elements of pay and the correct calculation and taxation of termination payments.

Payroll is a minefield and it is well worth your while in taking the time to ensure you get it right.  This way you are most likely to avoid being the next employer on the front pages of the papers.

Tracy Angwin is the founder and managing director of the Australian Payroll Association. 


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