Here Lewis & McNamara Solicitors we assist both employers and employees on a regular basis.
A common issue that arises in the employment sector is employers misunderstanding their obligations under Awards.
As the recent Lush Cosmetics payroll problems which resulted in employees being underpaid by over $2 million over an 8 year period shows, errors in payroll can have massive consequences for businesses. When the business is a large chain, it is possible for the business to rectify these errors without having to close their doors but small businesses may not have the capacity to withstand the consequences of a mistake of this kind.
Therefore, it is critical for all small businesses to fully understand which award applies to their employees, the wage payable to employees under the relevant Award and importantly any additional entitlements that employees may be required to be paid in certain circumstances.
Lush cosmetic’s payroll error highlighted the importance of making sure that staff are paid correctly, but this is an issue that has previously been highlighted by other high-profile cases including 7-Eleven, George Calombaris’s restaurants and The Rockpool Restaurants.
It is easy to see how a small error in payroll or misunderstanding regarding a small entitlement can accrue quickly. By way of example, if a small business employs 12 people each working an average of 20 hours per week and there is an error of $1.50 per hour, the underpayment by the employer would be close to $20,000 over the course of a year.
If left unchecked like the case of Lush Cosmetics over a period of 8 years, this could escalate to a debt that a smart business is unable to repay.
As a business owner you have a million and one things on your mind at all times and sometimes simple oversights can happen.
Lewis & McNamara can provide you with assistance in reviewing your Award obligations and agreements with staff to provide guidance as to the correct wages and entitlements payable to your staff.