Steps your business can take to avoid making common workplace law mistakes

8 June 2018

When it comes to complying with workplace law, it’s important as a business owner that you understand your obligations.

To help you to cross your T’s and dot your I’s, we recently spoke with Rob Hortle, Director of Campaigns at the Fair Work Ombudsman (FWO) to find out exactly how businesses can avoid making the three most common workplace law mistakes.

What are the ‘basics’?

The ‘basics’ are set in law and include fundamental entitlements and obligations set out in the Fair Work Act (2009), the Fair Work Regulations (2009) and the modern awards or agreements that apply to employing businesses.

It’s essential that every employer in Australia understands their responsibilities, but many small businesses have trouble identifying their legal requirements. This resource will step through the most common mistakes employers make and offer tips and strategies to keep your business on the right side of the law.

The 3 most common workplace law mistakes

“There are three major problem areas where we see small business owners consistently making mistakes,” said Rob.

1. Incorrect basic rates of pay

The first most common mistake the FWO sees is employers not paying the correct basic hourly rates. Some of the main factors behind business owners making this mistake include:

  • not knowing which award applies
  • not understanding how to calculate the correct pay rate
  • missing the annual wage increase.”

“Unfortunately for businesses, making this mistake can have a flow on effect”, said Rob.

2. Failing to pay penalty rates

The second most common mistake businesses make is incorrectly calculating penalty rates and entitlements, such as overtime.

3.  Pay slip and record-keeping errors

The third mistake is not issuing payslips with the correct information and not keeping records as set out by the Fair Work Act and Regulations.

How to make sure your business complies with workplace laws

Rob says, “employers can avoid these common traps and meet their requirements, by setting aside time to explore the tools and resources the FWO have developed to help them understand and comply with their workplace relations obligations.”

1: Getting employee pay rates right.

The first step is to know which Award covers your business.

“To do this, take a look at the FWO’s Award overview page which provides employers with all the information they need to find the right award for their business. If you’re not sure which award applies, the FWO’s handy Find My Award tool will help you work it out.”

Once you know which Award applies to your business, your next step is to use the P.A.C.T (Pay and Conditions Tool).

Using P.A.C.T you can find out:

  • the award that covers your business
  • the correct classification for your employees
  • their base rates of pay
  • penalty rates, overtime and allowance
  • leave entitlements.

The P.A.C.T tool also includes a Notice and Redundancy calculator that helps you calculate employee entitlements without entering an Award.

“You can also find out what the correct pay rates are for your Award by using the FWO pay guides. Each pay guide set out the basic hourly rates, penalty rates, allowances and overtime time entitlements for all employee classifications”, said Rob.

2: Getting pay slip and record-keeping obligations right.

There’s an extensive selection of resources available on the FWO website for employers to help them get their staff payslip and record keeping right. These include:

Fair Work Ombudsman Workplace Basics Campaign – what you need to know.

The FWO is currently rolling out the Workplace Basics Campaign to make sure small business owners around Australia understand their workplace obligations.

“We understand business owners face many challenges in meeting their workplace responsibilities, which is why this campaign is so important,” said Rob.

“This campaign gives us an opportunity to reach out to businesses and help ensure they are getting the basics right.”

“It’s important that all employers are aware of their obligations and know where to find the tools and resources that will help them comply with workplace laws.”

The FWO Workplace Basics Campaign will have two phases:

  • In the first phase of the campaign the FWO will work with specific employers to ensure they fully understand, and are complying with, the fundamental workplace law requirements.
  • During the second phase, the FWO will reconnect with non-compliant businesses to make sure they have made changes to comply with the requirements.

Be Prepared

“The FWO is selecting businesses to audit to make sure they are getting the basics right. So we encourage you to have your records in order”, said Rob.

If you think you have the basics covered, why not test the rest of your knowledge. Have a go at the FWO’s Workplace Basics quiz or take the self-assessment.

“If there is an area where you need to brush up, have a look at our Online Learning Centre. There are lots of helpful resources, including courses on having difficult conversations with staff, hiring new employees and more tips to help you get the workplace basics right”, Rob said.

What to expect if you’re audited

As part of the audit process, a Fair Work Inspector will contact you by phone or via email. They will ask you about your business, your employees and request a sample of records for audit.

“You will need to provide samples of time and wages records for your staff and a corresponding payslip for the same recent pay period. If you have any junior staff, apprentices, trainees, or workers on a visa, you will need to include records for these employees in the sample you provide,” advised Rob.

During the audit, Fair Work Inspectors will discuss the FWO’s tools and resources with you. If they find your business to be non-compliant with the relevant Award, agreement or the relevant laws and regulations, they will take the time to explain these obligations in detail before requiring you to address any issues. 

The FWO will also ensure you understand recent amendments to the Fair Work Act, and the impact of these changes on your business, including increased penalties for breaches of record-keeping and pay slip obligations.

Need more help?

Rob has some extra tips to help you stay up to date with the latest in workplace laws. “The best way to stay up-to-date is to register for your own account on the Fair Work website. You can receive personalised workplace law information and email updates about significant changes that affect you.”

By registering users can:

  • ask for help from the Fair Work Ombudsman
  • save results from the Pay, Shift, Leave and Notice and Redundancy Calculators
  • save favourite pages, including award summaries from ‘Find my award’.

“We also understand that it can be difficult to quickly find all of the different tools we have on our website. That’s why we put together our new Small Business Showcase,” said Rob.

“The showcase brings together all the information and resources on workplace laws and makes this easier for small business to follow.”

More information about the Workplace Basics Campaign is available on the Fair Work website.

You can also follow the Fair Work Ombudsman on Facebook, Twitter and YouTube for regular updates and information about workplace laws and requirements.