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Employee rights: Are you paying your employees enough?

May 11, 2016

noticing

Do you pay any employees an annual salary?

There is an incorrect assumption among employers that if you pay your full time employees a salary, you don’t need to pay overtime. Long story short, this isn’t always true.

If your employees salary has not been calculated to cover employees for working beyond 38 hours a week, and they end up working a large amount of overtime, you are likely to be at risk of an underpayment.

The operators of two motels in Victoria and New South Wales experienced this first hand when the Fair Work Ombudsman commenced legal proceedings against the husband and wife and their company NSW Management Services Pty Ltd. The Fair Work Ombudsman alleges that the couple short changed four Filipino workers more than $261,000.00.

It is alleged that one of the employees, a female, was underpaid at least $109,500 (more than many people make in a year!) for being paid very little or nothing for over 3000 hours of overtime she had worked.

Not only did the employers knowingly underpay their workers, but evidence alleges that two of the workers were instructed to under-record their hours.

Do you employ overseas workers?

This is yet another example where the Fair Work Ombudsman is coming down hard on employers who take advantage of vulnerable overseas workers, and show a lack of cooperation to the authorities.

The two individual employers are facing penalties of up to $10,200 per contravention of relevant workplace laws while the corporation itself is facing penalties of up to $51,000 per contravention.

If the Fair Work Ombudsman succeeds in their claim, the employers will also be ordered to back pay the four employees the underpaid amount ($261,000.00).

After reading the above, are you still sure you have calculated your employee’s salaries to include enough for overtime worked? Are you worried you might be underpaying employees who work an excessive amount of overtime?

Let us help you before it is too late.

For more information on salary arrangements and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.