Award Compliance Review
with concerns of underpayment
An employee raised concerns with their employer (Client A) that they believed they were being incorrectly paid. Client A commenced a review of the Award to address the employee’s concerns and quickly identified they did not have the internal expertise (due to the complexity involved in interpreting the finer details of the Award) to resolve the matter. Client A contacted Skildare for support. Skildare took the following course of action:
Review to ensure Award Compliance
Identify non-compliance (and potential underpayment) risks to the business
Recommendations for improved practices to ensure Award compliance moving forward.
"In 2019, the Fair Work Ombudsman reported that it recovered more than A$40 million for 18,000 underpaid employees during the financial year."
Client A’s employee worked on a casual rostered basis. Shifts rostered included a mix of early morning shifts, afternoon shifts, weekend work, and overtime. Skildare commenced a thorough review of the employee’s minimum entitlements under the relevant Award.
In doing so, Skildare first ensured the employee was covered by the correct Modern Award, and secondly, the appropriate classification within the Award. From there, Skildare identified the relevant rate of pay, penalties, allowances, loadings, etc. that were applicable.
This information was then assessed against what the employees was being. As a result of the review the following was identified;
* The employee had been classified incorrectly
* Overtime penalties were not being applied correctly
* Allowances owed were not paid correctly
* Shift penalty rates were being applied inconsistently
Skildare was able to articulate and quantify the amount of underpayment that was owed to the employee by Client A. Further, Skildare provided simple strategies to manage the matter with their employee including providing written communication to the employee outlining the findings of the review with steps to rectify same. Skildare also supported Client A in meeting with the employee to answer any questions and improve their payroll processing to ensure no future underpayments occurred.
Following this, Skildare worked with Client A to implement simple strategies to ensure better processes were in place to mitigate any risk of future payroll breaches.
The relationship between the parties was reinstated as the employer demonstrated their willingness to rectify their error and took steps to improve their processes on the back of Skildare’s review.
Client A implemented all recommendations as outlined by Skildare including annual payroll audits which have shown year on year Client A’s payroll has remained compliant.