The Australian Small Business and Family Enterprise Ombudsman Kate Carnell is calling on the federal government to make it easier for Australians’ wages and entitlements to be calculated correctly and paid on time.
“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,” Carnell said.
“Of course employers who deliberately flout the law should be punished, but any new penalties for incorrect payments should take the complexity of the system into account.”
Carnell said 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.
“Small businesses are often run by a single person who does everything from management, to IT and payroll. That makes it difficult for them stay on top of award changes within the elaborate industrial relations system.
“Recent media stories of very large and high-profile Australian businesses who employ skilled and experienced HR teams, underpaying staff highlights the complexity of the award system. ”
Carnell is calling for simplification of numerous industry awards, to help reduce payment errors and administration costs.
“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.
“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.”
Small employers urged to make the switch to Single Touch Payroll
The ATO is urging small employers who’ve not yet made the switch to Single Touch Payroll (STP) to get in touch if they need help to transition.
Small employers with 19 employees or fewer are now required to start reporting through STP but ATO Assistant Commissioner Jason Lucchese said there was still time for businesses to start reporting if they haven’t already.
“If you are a small employer and not sure where to start, there are three possible pathways to take,” Lucchese said.
”It’s really important for small employers to contact us if they have any concerns about their ability to transition to STP. You can also speak with your registered tax or BAS agent if you have one.
“We want the transition to STP to be simple and manageable for all employers, and no penalties will be applied in the 2019-20 financial year for small employers who make a genuine attempt to transition or for missed or late reports,” Lucchese said.
More than 540,000 employers across the country have transitioned to STP.
The ATO said it will continue to work with small employers to understand any barriers they may be facing and provide support to help them transition to STP reporting.
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