Another major Australian employer has “self-reported” huge underpayments to staff members, setting aside a startling $300 million to resolve the issue.
Reports suggest that the underpayments involved the payment of annualised salaries and the failure to carry out the required comparison to ensure that the amounts actually paid was equal to or greater than that payable under the relevant award.
Following the 4-yearly review of awards, new annualised salary clauses have been inserted into a number of awards and come into effect on 1 March 2020. The new clauses require the setting of “outer limits” of the hours covered by the arrangement and for records to be kept of the hours worked. An employer is required each year (or on termination of employment) to calculate the salary that would have been paid under the award and to make up any shortfall between that amount and the amount actually paid.
It is now time for all employers to review their employment practices to ensure that they comply with the requirements of the Fair Work Act and any relevant award.