New laws came into effect on 1 March 2020 in Australia which require businesses (in specific industries – see the list below) to keep time-sheets and records of hours worked by their full-time and part-time employees.
This new law is in response to a string of recent underpayment issues in the spotlight recently involving well known businesses such as Woolworths, Target, 7-Eleven and George Calombaris’ restaurants. With underpayments in the spotlight, the Fair Work Commission has been focusing heavily on fixing this issue, and ensuring that businesses comply with their requirement to pay employees in accordance with the law.
What is the change?
As of 1 March 2020, the Fair Work Commission updated specific Industry Awards to make it a mandatory requirement for specific businesses to keep track of the hours worked by their employees, regardless if they are on an annual salary or hourly wage.
List of businesses
Not all businesses in Australia are impacted by this change. The Fair Work Commission has focused primarily on certain Industry Awards where underpayments have been most common. Those Industry Awards that are affected include the following:
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- banking, finance and insurance
- broadcasting and recorded entertainment
- private sector clerks
- call centres
- horticulture industry
- hospitality industry
- hydrocarbons industry
- legal services
- local government industry
- manufacturing and associated industries
- marine towage
- mining industry
- oil refining and manufacturing
- pastoral work
- pharmacies
- rail industry
- restaurants
- salt industry
- telecommunication services
- water industry
- wool storage, sampling and testing
What do you need to do?
If you are a business operating in one of the above mentioned industries, you need to conduct regular and periodic reviews to ensure you are not underpaying your employees for additional overtime hours worked.
The new change will require an employer to tell their employee the following information:
- the hourly wage or annual salary to be paid;
- the provision of the applicable Industry Award being satisfied;
- the method by which the hourly wage or annual salary is calculated;
- the limit of ordinary hours covered under the hourly wage or annual salary; and
- the limit of overtime hours an employee may be required to work in a pay period.
To ensure your business is compliant with the new change, as a general guide you should:
- notify all employees who are affected by the change;
- ensure your employees document their hours worked in writing and submit those hours for review regularly;
- conduct regular reviews against the hours worked to identify any underpayments; and
- ensure you maintain and keep records of all the above.
Penalties for failing to comply
Non-compliance by a business will be considered a breach of the Fair Work Act 2009 (Cth).
The breach if prosecuted can result in a maximum fine of $63,000 for a business, and $12,600 for a Director / individual who is involved (either knowingly or unknowingly) in the contravention.
If you have any questions regarding this change in the law, or would like advice for your business, please contact Aaran Johnson on (02) 9233 1133 or ajohnson@marsdens.net.au or Simon Kumar on (02) 4625 5077 or skumar@marsdens.net.au to discuss.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
