As an employer, it is crucial to ensure that your employees are receiving the compensation they are entitled to. One way to do this is by offering annual salaries that capture and compensate for everything the employee is entitled to. However, it’s not enough to just have these salaries in place; employers must also take steps to ensure that they are accurate and that they are being paid correctly.

One important step is to record employee time worked accurately. This includes keeping track of start and finish times, as well as break times. Additionally, employers should check on the duties being performed by employees and where they are being performed. This will help ensure that employees are paid any applicable allowances.

Another important step is to complete reconciliations every 6-12 months. This involves comparing what the employee was paid to what they would have received had they been paid per award. If it is found that the salary does not cover the pay period worked, employers should make further payments to correct this.

It’s a reminder for Employers to take note that if these steps are not taken, it can lead to costly Fair Work investigations. A recent investigation found a parent company responsible for various subsidiaries to have placed the majority of their workforce on an annual salary, however, it failed to cover amounts required for overtime. This added up to a massive $1.14 million in underpayments from 2017-2019 for just a sample of 146 employees that were thoroughly checked.

In conclusion, Employers must take the necessary steps to ensure that their annual salaries capture and compensate for everything the employee is entitled to, and have the recorded information to evidence this. This will not only ensure compliance with Fair Work regulations but also protect the employers from any potential hefty bill.

Reference: https://www.fairwork.gov.au/newsroom/media-releases/2023-media-releases/january-2023/20230120-super-retail-group-litigation-media-release



Author: Pink Pichsinee Phungdet
After earning her Psychology, HR and Marketing degree from the University of Queensland, Pink has entered the HR world with wattsnext as an intern to explore her passion for people and HR management. Having to work with a few start-up tech companies, she can bring in her technological and marketing insights and be a future leader making a positive impact on the team.