COVID-19 has brought several challenges that have never been faced before by Australian Small Businesses. For many organizations, making small savings, day to day, could be the difference between continued operation and having to close. In these tough COVID times, we could be forgiven for expecting leniency. However, Victoria and Queensland have now passed legislation. This not only makes it an offense to underpay employees, as has always been the case. But they have introduced the additional penalty of potential imprisonment for business owners and operators.
In our decade of experience in the industry, deliberate underpayment of wages is rare. However, as seen in the media, underpayments do occur. Sometimes, it is the complexity of the Award system which leads to issues, in other cases, it is a misunderstanding of employer obligations and occasionally it is simply a calculation error. These instances should be rectified and dealt with accordingly once identified.
However, this genuine error has been labeled as “wage theft”, and in most cases, employers are vilified when they have identified the error themselves and have commenced a process of rectification. Despite this, State Governments such as Victoria and Queensland have introduced legislation to make underpayment of wages, in some cases, a criminal offense. We have not seen whether a genuine error will avoid being captured. The question now becomes. Will we be able to convince regulators that any error was genuinely inadvertent?
The introduction of the JobKeeper wage subsidy, which has become a vital lifeline for businesses trying to stay afloat, has added to the already complex wage environment in which a large amount of businesses operates. This has only gotten more complex with the introduction of JobKeeper 2.0, where rates and eligibility criteria have changed, and employers are asked to apply a two-tier wage subsidy to its workforce.
Now is not the time for employers to take their eye off the ball regarding wage compliance. You should not think it is alright to bend the rules to save much-needed dollars. We have been surprised in recent times, the increase in clients seeking payroll audits/reviews. Given the risks of getting it incorrect continue to increase, it makes more sense for your business to provide peace of mind that your payroll processes are correct and efficient.
RT Taxation accountant services for small businesses in the eastern suburb are well equipped to undertake these reviews to ensure that your Payroll is always correct, and no short cuts have been taken. These reviews can also identify, where employers, may be able to make savings in their payroll systems. If you have any questions about the accuracy of your payroll system and remuneration practices, now is the time to reach out to R T Accounting & Taxation Services for assistance.