Underpayment exposés have been regular headline fodder in Australia for close to a decade now and the retail sector has all too often played a starring role.
Come 1 January 2025, the stakes will become significantly higher when Australia is set to implement laws criminalising wage theft on a national scale. Wage theft refers to employers deliberately underpaying workers, withholding entitlements, or failing to pay penalties, overtime, and other agreed-upon wages. These wage theft offences do not apply to honest mistakes or miscalculations.
Businesses that have been found to have deliberately underpaid their staff may be handed significant fines – up to the greater of three times the amount of the underpayment (if the court can determine the amount) or $7.825 million. Guilty individuals, meanwhile, may be fined a maximum of $1.565 million and face the prospect of up to 10 years in prison.
These upcoming changes to the legislation have provided a prompt to many retail businesses to carefully examine their platforms and processes to ensure they’re fit for purpose.
Outdated programs and platforms
Unfortunately, in many cases, organisations are identifying that their existing systems, solutions, and processes fall short of what’s required.
Australia’s retail sector has had a challenging time of it in recent years, courtesy of intense competition, stagnating real incomes and a cost-of-living crisis which shows no sign of abating.
Hence, while some brands have invested heavily in customer facing systems, spending on back-office programs and platforms has very often taken a back seat.
Consequently, the shuffling of paper print-outs and spreadsheets is still the norm in many head offices, as is the manual checking of rostering data and hours worked.
It’s a modus operandi that’s time consuming and cumbersome and carries with it a significant risk of human error – a risk that compounds over time if mistakes go undetected and unrectified.
Tools to make the task easier
Fortunately, there are solutions that can support retailers meet their obligations. At the same time, organisations are increasingly looking to work with partners that can help them automate repetitive tasks, adopt best practice and simplify and streamline compliance support.
Automation technology can be deployed to strengthen payroll and help support compliance by reducing errors and improving data security, right across the rostering and payroll cycle.
Choose to work with a vendor who can provide the continuous calculation of pay and time as it is captured for up-to-the minute accuracy. Look for a solution able to seamlessly reflect the latest changes to Australian employment awards, and which can be customised to accommodate any enterprise bargaining agreements you may have, and you’ll enjoy greater confidence your organisation is doing things right.
Staying abreast of Australia’s IR overhaul
It’s not just payroll issues which are set for an overhaul, but Australia is also currently in the midst of a major industrial relations overhaul. The Federal Government’s Closing Loopholes legislation contains a number of key provisions that impact retail businesses directly.
They include new rules for casual employees and independent contractors and the right for franchisees and their employees to bargain together for enterprise agreements, if they’re carrying out similar activities under the same franchise umbrella.
There’s also been the roll-out of the Stage 2 tax cuts, which have seen a reduction in personal tax rates for all workers, changes to Parental Leave Pay entitlements and an upcoming increase in the Superannuation Guarantee Contribution, from 11.5 to 12 per cent.
Automated human capital management technology makes it easier for all organisations, retailers included, to adapt around IR changes like these as they pass into law, and leverage best practices and processes accordingly.
Setting up for a stronger future
In today’s times, Australian retailers have challenges aplenty to contend with but finding a partner to help you manage complex compliance requirements needn’t be among them. That’s why it pays to review automated solutions that can help provide your payroll and HR teams with the confidence to manage complex compliance. At a time when hard pressed brands and businesses can ill afford to get it wrong, it’s likely to prove an excellent move.
Rob Husband is vice president, market leader – head of revenue for ANZ at Dayforce.