ASBFEO calls on government to incorporate awards into STP
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has called on the federal government to simplify the reward system to help reduce payment errors and administration costs.
The ASBFEO Kate Carnell has proposed that modern awards be incorporated into the ATO’s new payroll reporting system to help employers navigate the space and reduce payment errors.
Ms Carnell opined that the rollout of single touch payroll provides an opportunity to calculate award wages and entitlements through an algorithm integrated into accounting software such as Xero, MYOB, Quicken and other software systems.
“This payment algorithm could be owned and updated by the Fair Work Commission to ensure correct wages and entitlements are correct and up-to-date,” Ms Carnell suggested.
Her plea was made in response to a string of high-profile Australian businesses admitting they had underpaid some of their staff.
It also follows PWC’s recent report which revealed that Australian workplaces are underpaying employees by $1.35 billion each year.
“While the vast majority of small businesses fulfil their obligations to their employees, the award system itself is overly complicated and fluid, which can sometimes lead to the employer making honest mistakes,” Ms Carnell said.
She admitted that while employers who deliberately flout the law should be punished, any new penalties for incorrect payments should take the complexity of the system into account.
“It is critical small businesses be given the chance to rectify payment errors, when it’s clear the mistake was unintentional, rather than being automatically penalised.
“When penalties do apply, they should be proportionate to the nature of the breach. A fine that a large corporation could absorb, could devastate a small business,” Ms Carnell said.
She reminded that small businesses are often run by a single person who does everything from management, to IT and payroll, which makes it difficult for them to stay on top of award changes within the elaborate industrial relations system.
“Finally, small and family businesses should not have to carry any additional administrative burden prompted by new proposals, particularly when they act quickly to resolve any errors that have been brought to their attention.”