Why Australian Employers Need to Focus on Timesheets

What is Fairtime?

Put simply, we help Australian businesses meet their payroll compliance obligations and eliminate the risk of employee underpayment.

Why do we exist?

More than 2 million Australians are employed under a unique set of employment regulations known as the Modern Awards. There are at least 120 of them spanning a diverse array of industries. In 2017 the Federal Government made changes to the Fair Work Act that have had a dramatic impact on the way industrial relations are regulated in Australia. For example, the penalties for businesses found to have underpaid staff have been raised to unprecedented levels. Also, the Fair Work Ombudsman was handed increased powers to enforce the regulations contained within the Modern Awards. The table below shows the extent to Fair Work enforcement activity has increased in the past 5 years

In 2022 there was 10 times more enforcement activity than there was in 2017. This means that employers have to consider changes to the way they engage staff. Some of the steps taken by proactive employers include:

– reviewing the contents of employee contracts (especially for staff employed under a Modern Award)

– ensuring that an effective time recording system is in place (a consequence of the changes to the Awards is that staff work hours must be recorded)

– producing compliance records when prompted to be able to demonstrate compliance with relevant Awards

If I think I might have a payroll compliance problem, what solutions are available for me and my business?

Consider this example. Trevor runs a wholesale nursery business that employs 25 staff. His employment contracts make reference to the “relevant Industry Award’ but Trevor hasn’t reviewed his contracts or the Award for at least 5 years. He knows that one of his major competitors just got a write up in an industry magazine for alleged breaches of the Horticulture Award and had to back pay $50,000 to its workers. Trevor suspects his business is at risk of non-compliance. When they begin their employment, Trevor’s staff are asked to record a timesheet in a logbook kept in the lunch room but it is not always completed by employees nor is submission enforced by management. Full time employees don’t see the point of filling in a timesheet each week because they are paid the same monthly salary regardless of how many hours they work. 

Trevor’s business is at risk because:

– Each employment contract must assign the employee a Level under the Horticulture Award based on their duties and experience;

– The salary or hourly rate assigned to each staff member should be cross-referenced to the minimum rates payable under that Level of the Horticulture Award;

– All staff must complete a timesheet to ensure that they are paid for every hour worked;

– Once annually, Trevor must complete a compliance check to ensure that he’s paid the staff their minimum entitlements under the Award.

To remedy this situation, Trevor can call his friend who runs a boutique law firm and get a written advice on pay rates and levels under the Horticulture Award.

If he needs help with implementing the changes to his contract he also has another friend that runs an HR consultancy and they can help him modify his employment contracts as a one off for a low fee.

In saying that, neither of these solutions help Trevor next time he has to ask one of his team to work overtime on a weekend. Trevor knows that he can’t call his lawyer every time he does his pay cycle to double check that his employee is getting paid the correct amount.

This is how Fairtime can help. We automate the process of assigning pay rates to employees so businesses don’t have to pay someone to do it manually.

Why should you trust Fairtime?

We’re experts in payroll and our software is designed to simplify the complexities associated with Award compliance. We’re also experienced lawyers and we can advise you and your business on your obligations under a particular Award. 

Modern Awards are inherently complex. In recent years we have seen some of Australia’s highest profile businesses publicly outed for wage theft. This has led to millions of dollars being back-paid to staff and serious penalties enforced by the Fair Work Ombudsman.

The changes to the Fair Work Act means that there are two main avenues that the Ombudsman will rely upon to uncover underpayment:

1. A Complaint from an Employee who has been Underpaid (‘Employee Tip Off’)

2. Random spot checks whereby a Fair Work investigator attends upon your business to request copies of payment records, timesheets & employment contracts.

It is estimated that 80% of businesses who employ staff under a Modern Award cannot demonstrate payroll compliance. This poses a serious risk to any business and one you cannot afford to ignore!

We’d love the chance to work with you, if you or anyone you know would benefit from our service please Contact Us today.