What is causing underpayments of employees’ wages?

Australia has 120 Modern Awards, plus many enterprise bargaining agreements in place, to ensure employees are paid fairly for their work. Within these awards and agreements there are many provisions relating to different penalty rates and entitlements employers must provide to their employees. When these provisions aren’t met, employees can be underpaid their correct wages.

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penalty and allowances blog

What employers need to know about penalty rates and allowances

Once you’ve identified the correct base rate to pay your employees, you’ll also need to ensure that any penalty rates are applied, and relevant allowances are paid. These are often areas where businesses make mistakes that lead to them underpaying their employees, so it is crucial for businesses to understand what they need to pay their employees and when they need to pay them each rate.

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Which award should you use

How to tell which award applies to your business?

One of the most common errors we’ve identified that leads to underpayments are businesses incorrectly classifying employees, whether that be choosing the wrong award, or employee classification within it. Ensuring that your employees are being paid under the correct award is the first step to being payroll compliant. Failing to be compliant at these first steps means all other payroll compliance measures in place within your business will be redundant.

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