Workplace Relations
What to do if a wage underpayment has occurred
With the focus on the wage theft legislation which comes into effect in 1 January 2025, there are proactive measures employers can take to prepare for the implementation of the new legislation.
All employers should undertake an audit of their payroll system to ensure the practice starts the New Year with peace of mind.
An audit should also include:
- a check of the Award classifications and minimum rates of pay
- check of employment contracts
- payslips to ensure they represent accurately the rate of pay, overtime payments, leave balances and superannuation payments. For further information Pay slips - Fair Work Ombudsman
- check that the correct tax and super guarantee contributions are being made. Home | Australian Taxation Office
The most common underpayments occur through payroll error. Let’s take a look at the steps that need to be taken when identifying any underpayment of wages.
- Determine how long the employee was underpaid.
- Determine how much the employee was being paid and their accrued entitlements.
- Calculate how much the employee has been underpaid.
- Discuss the underpayment with the employee and how the underpayment will be paid.
- Keep up to date with future wages increases.
The Workplace Relations Team provides reminders for upcoming changes to current and any new legislation that will impact workplaces in articles in WR News.
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