Paying your employees: What retail employers need to know

David Bates
David Bates BA(Govt) LL.B(Hons) Managing Director Workforce Guardian

Australia’s complex employment laws impose a large number of obligations upon retail employers when it comes to paying employees. This article looks at these obligations to help ensure you and your store are complying with the law.

  1. Finding the Right Minimum Wage

The first question you probably asked yourself when you last hired a new employee was ‘how much do I need to pay them?’ Finding the right minimum wage is often more difficult than many employers expect. The team here at Workforce Guardian recommends you follow these steps to find the correct minimum rates of pay:

  • Step 1: Confirm whether your employee is covered by a ‘Modern Award’. Most employees in the retail sector will be covered by either the General Retail Industry Award 2010 or the Vehicle Manufacturing, Repair, Services and Retail Award 2010. Finding the applicable Award is critical because Awards apply as a matter of law and not employer choice or preference.
  • Step 2: Award-covered employees must be assigned to one of the Award’s classification levels, and must be paid a wage that is at least equal to the corresponding minimum rate of pay. Award-covered employees may also be entitled to receive overtime rates, allowances, and penalty rates depending on where and when they work.
  • Step 3: In the unlikely event your employee is not covered by a Modern Award, you’ll need to pay them a wage that is at least equal to the National Minimum Wage (NMW). The current NMW is $17.29 per hour or $656.90 per week. Remember that lower rates of pay apply to ‘juniors’, and casuals must be paid the applicable ‘casual loading’.
  • Step 4: Lastly, you need to keep up to date with changes to minimum rates. Modern Award rates and the National Minimum Wage are adjusted by the Fair Work Commission each year on 1 July. Paying an employee below the applicable minimum rate is a serious offence, and hefty penalties and back-payments can be expected.
  1. Time and Wages Records

The Fair Work Act 2009 requires you to maintain up-to-date and accurate time and wages records for all employees. These must contain a large number of mandatory pieces of information about each employee. For example, they must show an employee’s commencement date, leave accruals, super fund choice, and all the contributions you’ve made to that fund.

If your employee is casual or someone who works irregular part-time hours, these records also need to show the actual hours worked by your employee each week.

It’s important to note that each missing item can result in penalties of up to $54,000, so it’s incredibly important that you review your records to ensure they’re fully-compliant. Workforce Guardian subscribers can find a full list of time and wages record requirements within the Fair Work Act: Overview section of their service.

  1. Issuing Payslips

You’re also required to issue Fair Work-compliant payslips to all your employees within 1 working day of processing payroll. You can give payslips to employees by hand, by email, or even by posting them to their home address.

The Fair Work laws make it compulsory for you to include a wide range of information on each employee’s payslip, including the date of payment, the gross and net amounts, and details of any loadings, penalties or overtime paid. It’s very important to note that payslips issued to casual employees must also separately identify their ‘base rate’ and the applicable ‘casual loading.’

  1. Paying Above the Minimum Rate

All too often our team is contacted by retail employers facing ‘wage underpayment’ claims who think they’ll be fine because ‘they pay more than the minimum’. Sadly, this is often not the case. Even if you pay well and truly above the applicable minimum rates, you may only be allowed to ‘off-set’ over-minimum payments against applicable penalties, overtime rates, allowances and loadings in limited circumstances.

This means retail employers often end up making significant ‘back-payments’ – or even paying hefty fines – to employees even though they paid them well above the minimum Award rate.

Please take time now to review your current rates of pay – as well as your time and wages records and payslips – to ensure you’re not the next retail employer caught out by Australia’s incredibly strict employment laws.

Disclaimer: This article is intended to provide commentary and general information only. It should not be relied upon as legal advice. Formal legal advice may be necessary in a particular transaction or on matters of interest arising from this article. Workforce Guardian Pty Ltd is not responsible for the results of any actions taken on the basis of information in this article, nor for any error or omission contained within this article.

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