The new year brought with it a new Australian Small Business Wage Compliance Code, which means intentionally underpaying an employee’s wages or entitlements can now be treated as a criminal offence.
Understanding this code is essential to ensure all employees are being paid correctly. While it might sound intimidating to hear that incorrect wage payments could result in jail time, the truth is that this code has been created with the best interests of businesses and their people in mind.
The Fair Work Ombudsman has provided assurance that as long as businesses can show they are operating with the right intentions, then honest mistakes in payments will be treated leniently.
Understanding the wage compliance code is vital for all.
The code introduces several changes aimed at reducing administrative burdens for SMEs with less than 15 employees, such as simplified record-keeping and clear guidelines on wage calculations. However, it also delivers stricter enforcement, with penalties for non-compliance.
Notable changes include specific documentation requirements, updates to minimum wage and award structures, and deadlines for these changes coming into effect.
While the Wage Compliance Code primarily focuses on fair pay, it is closely tied to other business obligations. For example, ensuring accurate superannuation contributions and staying up-to-date with tax requirements.
It is not a set-and-forget situation; it’s an evolving work in progress requiring regular reviews, ongoing professional development and staff training.
We Can Help
The team at Financially Sorted are up-to-date with the most recent wage compliance code and the impacts on small business. If you wish to ensure you are compliant and managing your payroll effectively, please contact us for support.