Franchisors and holding companies will now be held accountable for the underpayment of wages, poor wages record keeping and non-issuing of compliant pay slips.
The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed the Parliament on 5 September giving the Fair Work Ombudsman capacity to take action in cases of exploitation of vulnerable workers.
What does this mean for franchisors and holding companies?
Historically, franchisees were individually responsible for workplace obligations with regard to paying minimum wages and other entitlements under the Fair Work Act 2009. With the new law now passed by parliament the responsibility will also fall back on the franchisor and holding companies where they knew, or reasonably should have known, about the contraventions and failed to take reasonable steps to prevent them.
What are the key changes?
- Certain franchisors and holding companies become responsible for underpayments by their franchisees or subsidiaries where they knew, or reasonably ought to have known, about the contraventions and failed to take reasonable steps to prevent them
- A new category of serious contraventions has been introduced, with penalties that are ten times the current maximum where employers knowingly contravene and it is part of a systematic pattern of contravening conduct
- New penalties for providing Fair Work inspectors with false or misleading information or records, and new prohibitions for hindering or obstructing them
- The prohibitions against unreasonably requiring employees to make payments, commonly seen as cashback arrangements, have been strengthened and extended to prospective employees
- Maximum penalties for record-keeping and pay slip breaches have been doubled, and the maximum penalty for false or misleading employment records has been tripled. New penalties apply for giving false or misleading pay slips
- Employers who do not meet record keeping or pay slip obligations and cannot show a reasonable excuse, will need to disprove wage claims made in a court
- The Fair Work Ombudsman’s evidence-gathering powers have been strengthened
How can you ensure you comply?
Hiring expert resources who understand the Fair Work Act 2009, including employee minimum pay rates and entitlements is vital for all businesses in Australia .
Having untrained and unqualified resources or taking a DIY approach in handling this side of your business will leave you exposed and vulnerable to large fines. It also attracts negative and damaging exposure via the media which will have a knock-on effect to successfully sell franchises.
Saving costs by not engaging specialists and experts in payroll processing and human resources may ultimately cost you more than you bargained for.
Therefore, you MUST get the right people involved.
At lucent we understand that the business of paying employees can be a mind-field of changing legislation, compliance rules, paperwork, paying people to current rate, and seemingly endless record keeping. However, we also believe that your payroll team, their expertise, systems and the integrity of their process is a critical ingredient for your business success.
We have the ultimate outsourcing Payroll and HR solutions to ensure you and your franchisees are compliant and will give you piece of mind. Here are 7 reasons to partner with us:
- We have a team of qualified payroll experts to process your payroll
- We use state of the art technology to facilitate and streamline the management of your payroll & hr functions
- We offer peace of mind that all your compliance obligations are being met
- You will have access to HR expertise who advise the payroll specialists on compliance pay rates and other employee entitlements.
- We will give you back your time allowing you to re-focus time and effort into your related areas of expertise
- We guarantee confidentiality that can only come from external payroll management
- Comparative cost savings/competitive fees apply
For an obligation free meeting to discuss your needs please call us on 08 8471 7007.