By Annette Micallef
We recently hosted an exclusive online event, where Senior Workplace Relations Consultant at HR Assured, Amanda Curatore shared some valuable employment relations advice and showed attendees how to conduct a basic HR audit to ensure their businesses are compliant.
If you missed the event or you would like to understand the importance of HR compliance, here I cover some of the key topics Amanda discussed at the webinar including modern awards; annualised salaries; employment contracts; casual employment; and employment records.
So why an HR audit?
Amanda says that, at the very least, conducting a basic HR audit is something businesses need to get into the habit of doing often – it’s the best way to uncover any mistakes and vulnerabilities in the way that businesses manage and pay their employees.
Mistakes such as underpayments, overpayments, incorrect or weak employment contracts and paying an employee under the wrong award can all prove to be costly errors to a business. Receiving a significant fine or penalty, having to reimburse employees, paying legal costs, and not to mention the stress and time spent sorting out these problems, can be damaging to a business especially during a pandemic! That’s why it is crucial business owners and operators thoroughly review their workplace practices often and rectify any issues that come to light immediately.
Key takeaways
Amanda’s presentation covered some areas businesses should review during an HR compliance audit. Let’s take a look at them and I’ll provide a key takeaway for each point:
1. Modern awards
Did you know that there are three types of modern awards? Industry based, occupational based and enterprise. There are also over 120 modern awards businesses need to select from to pay employees. As you can imagine, determining which modern award applies to your business can be incredibly tricky – but that is no excuse if you make a mistake! Many well-known brands equipped with large HR teams have managed to make some big underpayment errors – if they can get it wrong, then any business can. Your business must choose the right modern award/s to ensure your employees receive the correct payment and conditions they’re entitled to.
2. Annualised salaries
If an employer chooses to pay an annualised salary to compensate for award entitlements, it’s essential that the employee’s contract of employment clearly specifies what award entitlements the annual salary has been calculated to compensate the employee for. In addition, the contract should also have a ‘set-off’ clause. Without this clause, the employee may have an argument that they should be paid the award monetary entitlements in addition to their salary.
3. Employment contracts
While there is no legal requirement to issue an employee a contract of employment, a contract of employment is a crucial factor of an employment relationship as it outlines the employee’s terms and conditions of employment. A tailored contract of employment will significantly assist the business in all areas of their people management responsibilities.
4. Casual conversion clause
Amendments were made to a number of modern awards back in 2018 which require an employer to provide all casual employees engaged under the corresponding award, whether a regular casual employee or not, with a copy of the provisions of the casual conversion clause within the first 12 months of the employee’s employment. Failure to comply with the clause is considered a breach of the award and can result in significant fines and penalties.
5. Employment records
Under the Fair Work Act (2009), employers must keep employee records for at least seven years. Failure to do so not only may result in significant fines and penalties but now under the Protecting Vulnerable Workers Act 2017, there is a reverse onus of proof which require employers to disprove underpayment allegations in court if they have failed to keep adequate time and wages records or issue payslips.
Free tools to audit your business
If you’d like to conduct a basic HR audit of your business to understand if it’s compliant, download our FREE HR Compliance Health Check.
We know that business owners are incredibly busy people and it’s not always easy to conduct a thorough audit when you’re trying to run a business.
If you run a small or medium-sized business and don’t have a dedicated HR manager to help you with this, think about creating an HR function through outsourcing. It’s more cost-effective than hiring an internal HR specialist, and gives you access to vastly more support and expertise than one person alone could provide, no matter how well-trained they are.
Our HR solution
At HR Assured we offer industry-leading audits that will determine if you’re a non-compliant business, and where you are non-compliant, we help you fix these issues. We can also undertake cost-effective and confidential underpayment audits using our award-winning PayCheck system*. We can even take care of your compliance afterwards, with full HR support that includes HR management software and an award-winning 24/7 Telephone Advisory Service.
Get in touch with us if you’d like to find out how we can help.
*PayCheck – winner of the 2017 LexisNexis Award for Legal Innovation.
Annette Micallef is a Content Marketing Manager and works for FCB Group (HR Assured’s parent company). Annette is an incredibly passionate and enthusiastic marketing communications professional and she is responsible for creating interesting and meaningful content across FCB Group’s businesses. When Annette isn’t creating e-Books, email campaigns and blogs, you can find her in the great outdoors; she loves being surrounded by nature and considers this to be her happy place where she finds inspiration and ideas.