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Are you paying your staff correctly?

November 2019

 

Woolworths is the latest company to face a fallout from underpaying their staff, but it's not just wages-it's also super and the penalties that come with not paying the right amount.

In what is believed to be the largest remediation of its kind, Woolworths have stated that they have underpaid 5,700 salaried team members with remediation expected to be in the range of $200m to $300m (before tax).

The discovery was made as part of a two-year review following the implementation of a new enterprise agreement but could have been occurring since the implementation of the modern award in 2010.

Illustrating the complexities of Australia's award rates, entitlements, and enterprise bargaining agreement systems, several large companies such as 7-Eleven have been found to have underpaid their staff in recent years. Woolworths, however, appears to be on the front foot, issuing a statement stating: Annual salaries for store team members are set to cover ordinary working hours and reasonable overtime. However, team members are entitled to be paid the higher of their contractual salary entitlements, or what they otherwise would have earned for actual hours worked under the GRIA. The review has found the number of hours worked, and when they were worked, were not adequately factored into the individual salary settings for some salaried store team members. Woolworths Group is committed to fully rectifying these payment shortfalls and an extensive plan is in place to ensure salaried team members' pay is correct and compliant moving forward.

Interim back payments will be made to affected staff identified in the initial review before Christmas. Woolworths states that full remediation will be made as soon as practicable to all other staff impacted.

We cannot stress the importance of ensuring that staff are paid at the correct rates. If staff are underpaid, it is not simply a matter of making a catch-up remediation payment-underpayment of super entitlements can also incur significant penalties and charges.

To ensure that your staff are paid at the correct rate, check the

Fair Work Ombudsman's pay and conditions tool

and see their guide to

audit your pay rates

For a review of your payroll, entitlements, and super, contact us on 02 9957 4033.

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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