Retailers, pay up

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Fair Work Ombudsman executive director policy, media and communications Tom O’Shea talks tips you need to know to avoid trouble.

The easiest way to avoid problems with a Fair Work Inspector is to check – and check again – that you’re doing the right thing. Time and again we find that the cause of significant problems in a workplace can be traced back to inattention to detail.

It doesn’t matter whether you’re a small corner shop or a major national retailer, it’s critical that you know you have the basics right.

Get the basics right, and everything else should fall into place.

Ask yourself if you have the most recent wages information, are you issuing pay-slips on time and in the prescribed form, are you maintaining the proper employment records for your staff? It’s generally true that most employers who approach us want to do the right thing, but are struggling with the basics.

Our experience suggests that workplace law can be complicated, particularly for the uninitiated and those who are not industrial experts – and the margin for error is high.

In the 2014-15 financial year, the Fair Work Ombudsman recovered $22.3 million in underpaid wages and entitlements for 11,613 employees nationally.

The retail sector continues to figure prominently in the industries which generate requests for assistance from employees, coming in third last financial year behind accommodation & food services and the construction industry.

More than a quarter of requests for help last financial year came from young workers (aged under 25) – and again, the retail sector accounted for 11% of these behind the accommodation & food services (22%) and construction (16%).

Here are some helpful tips on how retailers can minimise their risks of non-compliance:

Awards and classifications

Most of the underpayment matters we find in the retail industry are inadvertent and the result of retailers not fully understanding the workplace laws that apply to their workplace.

Businesses need to know three key things:

• Which Modern Award or enterprise
agreement applies to your workplace,
• The correct classification/s for your staff, and;
• The applicable pay rates.

Penalty rates

Night, weekend, overtime and public holiday work are common features of the retail industry and retailers need to ensure they take the time to ensure they’re aware of what the correct penalty rates are for staff who work outside normal hours.
One common issue we find is where employers pay a flat hourly rate that is above the minimum rate for normal hours, but not sufficient to cover shifts that attract penalty rates.

Annual pay increases

Minimum pay rates generally increase on July 1 each year following the Fair Work Commission’s Annual Wage Review decision - and retailers are among the many employers who sometimes overlook the need to adjust pay rates accordingly.
It’s important that retailers are aware that the Annual Wage Review decision increases not only the National Minimum Wage, but also base rates of pay in modern awards and enterprise agreements.

Opening and closing stores

A myth that exists in some parts of the retail industry is that employees don’t need to be paid for time spent opening and closing a store or attending training and meetings outside normal work hours.

The fact is that employees must be paid for all the time that they are required to work. For example, if an employee is required to be at work at 7.45 am to prepare for an 8 am store opening, they need to be paid from 7.45 am. If the employee is asked to stay back after work for a staff meeting or training session, they also need to be paid for that time.

Payslips and record keeping

Failing to keep correct employment records and issue employees sufficiently detailed pay slips is a persistent issue in the retail industry.

Fair Work inspectors visit thousands of businesses every year and find that if businesses aren’t keeping proper time-and-wages records and issuing employees with pay slips, the chances are they will have other non-compliance issues, including staff underpayments.

Some employers view compliance with their record-keeping obligations as a minor issue – but employers that don’t have a detailed written record of basic matters such as employees’ hours of work and how wages have been calculated are inviting problems.

Under workplace laws, employers must keep prescribed employment records for employees and former employees and issue employees sufficiently detailed pay slips within one day of pay day.

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