Small business in Australia is being disproportionately prosecuted and fined by the Fair Work Commission. One of the latest cases reported is that of a Newcastle-based airport transport company which was fined over $286,000 for underpaying seven employees $26,000 over 11 months. This is the largest Fair Work fine to date in NSW.
Of course, this is not the only case of this kind in the news recently. If you read publications like SmartCompany you’ll regularly read about these sorts of Fair Work cases. Sometimes the business owners seem to be wilfully ignorant about their obligations, but more often than not it is a matter of being confused about how to interpret their pay obligations.
Small businesses don’t typically have the legal and advisory resources that their larger corporate cousins have, and therefore are more susceptible to these prosecutions. Being a small business owner myself, I know the financial and emotional investment it takes to set up a business. So to have it wiped out because you employed or paid your staff incorrectly would be devastating.
The sad thing is that many small businesses are getting fined because they are ignorant of the regulations and the risks. Not understanding your employment obligations is no defence at Fair Work and they are prosecuting accordingly. Even when you fully co-operate with a Fair Work investigation, you may get fined several hundred thousand dollars.
A good first port-of-call for any business owner is to visit the Fair Work Ombudsman’s employer obligations resources page and become familiar with some of the basics such as employer records and payslips, internship payments, and on-hire employee payments.
Most of our clients at Australian Payroll Association are large corporates. They use our resources to ensure they avoid these fines.
Because of the trend in small businesses getting huge fines, we have redesigned some of these resources to support small business. Big business generally needs assistance with complex payroll situations, but we find small business need support for general employment obligations. Knowing what they are and making sure they deliver to the regulations.
We have put together a solution to protect our small business friends. Take a look at our short animated video to see how it works.
By understanding your business’s employment and payroll regulations, you can spend more time doing what you do best – and less time worrying about a letter from the FWO.
If you have any topics you’d like me to cover in future blog posts, please get in touch with me at [email protected]