All small business owners in Wollongong and the Illawarra should know about the underpayment of wages. From the 1st January 2025, deliberate underpayment of wages could result in owners and managers of a small business being sent to goal.
All businesses in Wollongong and the Illawarra must pay the correct award rates of pay, as well as the correct overtime and penalties, particularly for shift and weekend work.
Many Wollongong and Illawarra businesses are unsure what Modern Award covers in their workplace and how the award-covered employees should be classified.
Some businesses pay an employee an annual salary and say the position is awarded free.
Businesses must consider the true nature of the role and the authority of the people who occupy it before making that person a manager and not award-covered.
Incorrect classification will result in overtime, penalty payments, and underpayments. Owners and managers may also be prosecuted.
What should small business owners and managers in Wollongong and the Illawarra do to avoid criminal prosecution for underpayment of wages?
- Making reasonable efforts to ascertain the correct rates of pay and entitlements for their employee and reasonable efforts to stay up to date with their obligations related to paying their employee.
- Consider and rely upon information the employer reasonably believes accurate (such as the employee’s role, duties, classification, relevant qualifications, age, hours and work location).
- Seeking reliable information or advice about paying the employee’s applicable pay rates, overtime, and penalties.
- Taking reasonable steps to rectify any identified underpayments and remedy deficiencies in an employer’s systems.
John Morrissey can help with wage audits to ensure that the business pays the correct pay rates and that all employees are correctly classified if an award covers their work. Ring John on 0407069507.
Disability discrimination
The Commonwealth Disability Discrimination Act states that it is unlawful for an employer to dismiss an employee because of a workplace injury.
If the workplace injury means that the employee cannot carry out the inherent requirements of the role and the employer cannot make reasonable adjustments for the employee in the role, the employer can dismiss the employee.
An adjustment will be unreasonable if it creates an unjustifiable hardship on the employer.
The termination process
To guard against the risk of unfair dismissal, an employer should also follow a fair process when dismissing an employee who has been on workers’ compensation for an extended period. The employer will need to gather evidence that the employee cannot carry out the work associated with the role.
Invariably, the best medical evidence is provided in a medical report by an independent medical practitioner who has examined the employee.
The employer should direct the employee to attend an independent medical examination. The employer should ask the doctor for answers to specific questions regarding the employee’s fitness to perform the inherent requirements of the role.
Once the report has been returned and on the assumption that it demonstrates that the employee is unable to return to his/her pre-injury position, the employer can then commence a show cause process
When the employee’s response is received and does not provide an adequate reason that the employment should not be terminated, the employer can proceed.
