We only have to look at the George Calombaris scandal to see what damage underpaying staff can do to a business.
And whether you agree or disagree with the furore surrounding this case, one thing can be established here.
The Fair Work Ombudsman (FWO) can and will prosecute underpaying employers.
But in spite of this enforcement, paying staff legally isn’t that simple – even if your employees agree to their pay rate.
As an employer, it is your job to determine when you must pay your workers overtime, penalties or shift allowances, and casual loading. Not to mention statutory entitlements and incentive-based payments or bonuses too.
Every component comprising minimum wage requirements is strictly legislated and if the FWO finds that you have underpaid your employees any of their entitlements, even unintentionally, you can face serious penalties. And you don’t have to be a large employer either.
All employers are on the FWO’s radar and anyone who fails to pay workers their correct minimum wages and entitlements can end up in court.
Two months ago, a family business owner who ran three Tokyo Sushi outlets in NSW was fined more than $380,000 for underpaying her staff. This was despite the fact she paid her workers 25% loading on Saturdays and 50% loading on Sundays. She was also ordered to back pay them around $70,000.
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