If an employer fails to pay an employee the amount required at law (intentionally or accidentally), the employer will be exposed to a number of claims and costs including:

  • back pay to rectify the underpayment
  • back pay of unpaid superannuation
  • fines for breaching an applicable award or agreement. The maximum fine for a contravention of a civil remedy provision of the Fair Work Act 2009 (Cth) (Act) is currently $63,000 for a body corporate and $12,600 for an individual. However fines as high as $630,000 for a body corporate or $126,000 for an individual can apply to serious contraventions of a civil remedy provision of the Act;
  • costs to audit past payment
  • disruption to your business.

An employer cannot rely on the excuse – they did not know. It pays to be proactive with this type of work to avoid a claim and to be able to successfully defend an issue if raised.

Record keeping is an area that can also get an employer into trouble. Records need to be kept for:

  • general employee details (personal details and key employment terms)
  • pay
  • hours of work
  • leave
  • superannuation contributions
  • individual flexibility agreements
  • guarantee of annual earnings
  • termination
  • transfer of business

Pay slips that comply with the details required by the Act and Regulations must be given to employees.

Given the complexity of various awards and agreements, if you need assistance to check you are complaint or to defend an underpayment claim  – click here to make an appointment with us.

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