What payroll and finance managers need to know about Australia’s proposed wage theft laws

Recently, there’s been a lot more talk about wage theft in Australia as proposed new laws shine a spotlight on the problem. While it might be hard to believe, wage theft happens often. It’s an issue that impacts many workers, with about $1.35 billion in wages not being paid every year. And it’s not only happening in small companies. Universities, major airlines, large retail stores, and restaurants are all impacted. Even when accidental, underpayments have become a serious concern for Australian workers.

For payroll and finance managers, the proposed national wage-theft laws mean business. Employers could face severe consequences if they knowingly underpay their staff, including jail time of up to 10 years and fines of up to $7.8 million. And for large-scale underpayments, the fines can be even more substantial — up to three times the amount unpaid — which could be more than $23.4 million.

What you need to know

The proposed national wage-theft laws are part of a big push to make sure everyone gets a fair day’s pay for a fair day’s work. Here’s what payroll and finance managers need to know:

• Criminal accountability: The updated laws impose criminal charges on employers who willfully neglect to pay their workers correctly. Intentional underpayments can lead to severe sanctions, including hefty fines and the possibility of imprisonment.
• Protection for vulnerable workers: The legislation strengthens safeguards for those most susceptible to wage theft — including migrant, casual, and gig-economy workers — ensuring they receive their rightful earnings and benefits.
• Confidential reporting channels: New provisions support the establishment of anonymous reporting processes, offering a safe space for employees to disclose underpayments without fear of retaliation.
• Mandatory record-keeping: Employers are required to maintain accurate and verifiable records of hours worked and wages paid, streamlining both the auditing and compliance processes.
• Minimum wage enforcement: The legislation clarifies the statutory minimum wage to eliminate any ambiguities and ensure uniform compliance across the board.
• Liability for complicit advisors: Advisors who knowingly contribute to, or advise on, wage-underpayment practices face liability, ensuring accountability extends beyond employers to those who provide professional guidance.

Payroll steps to take now

With Australia’s latest wage-theft laws in play, let’s talk through the must-dos for your payroll process to keep it above board and stress-free:

1. Accurate and compliant record-keeping: Implement systems that accurately track work hours and payments. Records must be easily retrievable and clear to prevent disputes.
2. Minimum wage checks: Regularly review and adjust payroll to ensure all employees receive at least the minimum wage and appropriate entitlements.
3. Transparent employment contracts: Maintain up-to-date contracts that clearly outline wages and conditions, and keep on top of any legislative changes.
4. Efficient reporting processes: Set up a reliable and confidential process for employees to report wage concerns, safeguarding them from potential retaliation.
5. Regular payroll audits: Conduct frequent audits to identify and correct discrepancies, ideally with the oversight of an external auditor for impartiality.
6. Up-to-date payroll software: Ensure that your payroll software is current and can handle legislative changes automatically. The right software can simplify compliance and minimise errors.
7. Continuous education and training: Invest in ongoing training for your payroll team to keep them informed about the latest compliance requirements and best practices.

How Affinity can help

Affinity can help you get your payroll right with two tailored options.

Our fully managed solution lifts the burden, starting with a detailed review of your current system to target improvements. We then craft a bespoke payroll solution that aligns perfectly with your business flow.

Alternatively, our supported payroll service augments your existing payroll team. We provide you with the necessary tools, guidance, and knowledge to refine your processes, including ongoing updates for legislative compliance.

Both services guarantee that your payroll meets stringent compliance standards, from meticulous record-keeping to precise wage and entitlement calculations, all while navigating the latest regulations.

Ensure your employees are paid accurately and on time, every time. To learn more, reach out to the Affinity team today.

For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.