Brand equity is seriously threatened when franchisees don’t comply with Australia’s industrial awards and wages system. A single franchisee failing to follow the guidelines can tarnish the name of the others, even though they are independent operators making their own employment decisions.

Whilst there might on occasions be some confusion for franchise sector employers regarding their employment obligations, it is incumbent upon them to both understand and respect those regulations or claims of underpayments may come knocking on their doors too.

This is not a new problem and nor is it an isolated incident.

BRW has highlighted the dangers to franchises for a number of years. This was from 2013:

“Employers are increasingly under the microscope for alleged breaches of the Fair Work Act, and in La Porchetta’s case, all it took was a single complaint from the parent of a teenage employee to uncover another 110 staff members who were potentially underpaid through the two restaurants in Pakenham and Berwick.”

A franchisor’s inability to monitor every single franchisee’s actions means that it can be easy for a rogue franchisee to slip through the net, attracting negative publicity, and damaging the brand.

The new "Vulnerable Worker" laws also hold franchisors responsible for contraventions and underpayments by franchisees, unless the franchisor has taken "reasonable steps".

The Solution: Payroll audits

In response to this demand ER Strategies has launched an Independent external audit service to review store-level compliance for businesses potentially at risk and to help prevent the damaging publicity and hefty fines that may result from non-compliance.

The idea is to help identify issues early so they can be dealt with internally by the Franchisor, rather than by outside bodies such as the FWO and the media.

Areas which will be audited as part of this service will include:

  • payslips and wages records
  • rostering
  • pay calculations
  • award and EA compliance
  • visa restrictions
  • Ensure necessary records are being kept and are accurate (e.g. Visa's, payroll)

ER Strategies can provide a tailored wages audit program to suit your business – whether it is conducting desktop payroll audits to determine issues with wages in one store, or full in-store audits including interviews with employees.

Our audits can also provide reporting on compliance with independent body FRANdata Workplace Transparency Standards.

Our experienced team of auditors is led by ex-Fair Work Ombudsman Inspector David Price, with our audit team having collective experience in fields including Human Resources, Police Investigations and Accounting.

Enquire whether we can service your business - call us on 1300 55 66 37, or complete a contact form and one of our consultants will contact you shortly.