Employers — particularly SME owners — are being unfairly tarnished as wage thieves under Australia’s complex system of workplace laws, an employment adviser has said.
That is the belief of Employsure managing director Ed Mallett, who argued that the term wage theft is “unfair and it’s wrong”.
“I’m sick of small business owners being characterised as ‘thieves’,” Mr Mallett said.
“They are operating in a complex and convoluted system that creates so much risk and almost no margin for error, then punishes them for mistakes.
“As we’ve seen recently, some of Australia’s biggest companies with immense HR resources can’t get wages correct. What hope is there for a small business?”
According to Mr Mallett, there are currently “all manner of systems trying to catch underpayment, but very few that try to prevent it in the first place”.
His comments were part of a new product launch by Employsure aimed at addressing the issue of underpayments.
The issue of wage underpayments has long been a hot-button topic in Australians workplaces, particularly in 2019 following a string of self-disclosures by corporate Australia of historic underpayments equating to many millions of dollars.
In its annual report for the 2018–19 financial year, the Fair Work Ombudsman (FWO) said that its compliance action had seen more than $40.2 million in underpayments reimbursed to more than 17,000 workers across Australia.
Wage underpayments have caused something of split in sentiment between employers and workers. The latter have felt aggrieved at having their legal entitlements not fully paid by companies — particularly where those companies are large corporations posting multimillion-dollar annual profits.
“If you can’t afford to pay the correct wages, then you shouldn’t be in business,” one My Business reader said in response to the FWO’s annual report.
However, employers — particularly small and medium businesses — have argued the system is almost set up to fail, given its complexity drastically increases the chance of mistakes being made and then going unnoticed for a considerable period of time.
“SMEs have no money and are struggling to make ends meet. Sure, there are many complaints about the poor workers not getting the huge benefits that they are entitled to; however, what about the owner of the business who often is paid way less than the employees,” one employer replied to the above comment.
“There is no government agency looking after them ensuring that their entitlements are paid. We work long hours without overtime or penalty rates, and super.”
Sharing this view is the co-founder of Employment Hero, Ben Thompson, who previously said that simply understanding the rules is “incredibly difficult”.
“To appreciate why, just consider that in order to pay one employee correctly for one shift, an employer needs to understand each of the following 33 factors (and more),” Mr Thompson said.
“They then need to know how to apply them within their particular business context after reading and interpreting hundreds of pages of legalese.”
Meanwhile, research by the Australian Payroll Association late last year suggested that as many as 80 per cent of employers are using outdated payroll software.
Fair Work Ombudsman Sandra Parker has previously said that her office would seek to use more compliance notices instead of penalties, as a means of helping employers to do the right thing and not punish them for making honest mistakes.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.