There has been a lot of media attention regarding George Calombaris underpaying his employees which was due to annual salaries being incorrectly calculated leading to underpayment of superannuation. Unfortunately for George, paying your employees the incorrect amount of superannuation is one sure way to get Fair Work’s attention.
I should confess that as a big fan of MasterChef, it was with disbelief that I read about the underpayments. Unfortunately, this is quite common and many businesses underpay their staff without realising it or intending to do so. As cliché as it sounds, ignorance of the law is no excuse.
This could have been easily avoided if the employment contracts and wages were reviewed. This simple act could have saved George the media attention, the backpay and the $200,000.00 fine he paid. It is a steep price to pay for something that is so easily avoidable. It also comes at a time when Fair Work Australia is cracking down on underpayment of employees as we saw only last year in the media with six Brisbane 7-Eleven stores being fined for underpaying staff.
Superannuation is also one of the few payments directors can be personally liable for. This means that even if your business is owned by a company, the directors will be personally responsible if there is any underpayment of superannuation. So, the first step when hiring a new staff member, or updating your employees’ wages, should be to consult a professional. This will ensure that you are paying staff the appropriate award rate and allow you to accurately calculate penalty rates and overtime. Some awards even dictate when and how wages are to be paid. So, it is surprisingly easy to be in breach of the award if you do not obtain professional advice.
At Cooke & Hutchinson Lawyers, we will meet with you for 30 minutes completely free of charge. Any work required to be undertaken is attended to at a fixed price agreed to at commencement. There are no timesheets in our office. As an employer, it costs you nothing to know where you stand. Don’t be a George, make an appointment to see us today.
Written by Constance McClymont – Senior Associate