Now I don’t pretend to know everything about payroll. I don’t operate in it on a daily basis as I don’t manage the firm’s payroll, nor do I manage any clients payroll. What I do know enough about is to leave it to the experts.
When it comes to getting payroll right every time, I do know that unless you are some kind of professor who has studied at some elite payroll school, you will make a mistake from time to time.
We don’t have an easy system of award expectations in this country. Every award has its own nuisances that will trip you up if you don’t interpret it correctly. So even if you’ve read one of these onerous documents, don’t expect that every award covers the same minimum standards.
There is good news: you won’t go to jail if you get it wrong, however, do expect to have an emotional deflation when an employee makes a complaint.
So what happens when an employee makes a complaint about their pay conditions?
My first advice to everyone is stop, get it professionally looked at, and then communicate with the employee with any error and payment of the error.
What most businesses do is they have the payroll administrator look over the pays made (the ones they already prepared), come up with an explanation as to why they think it’s correct and go back to the employee with maybe some adjustments or with “we’re right, go away”.
But the employee who thinks they’ve genuinely been not paid correctly will not go away.
This is where it can get ugly and before you know it, the employee is causing you all sorts of sleepless nights because they don’t agree with your figures.
So why go through trying to do it yourself in the first place? To save money of course because you believe you’re right and they are wrong.
My recommendation is to invest some time with an expert and have it reviewed correctly with justification to the employee that you used an expert to do a check over the correct pay rates, any applicable loadings and any leave entitlements are accruing correctly.
Don’t even pretend to understand the award if you haven’t been trained in this field.
If you don’t follow this advice you may find yourself in front of an ombudsman or someone from fair work and they take the side of the employee every time to find what they didn’t get paid correctly, rather than find what you are doing correctly. And it won’t be pretty for you if you have to deal with these people.
Not only does a wage dispute fracture any ongoing relationship you may have with that employee, assuming they may be continuing to work for you, it can also cause strains with other employees.
As soon as other employees know a wage dispute is being looked at, they may be the next ones lining up.
Just when you think you may be paying everything correctly by applying the right amounts of overtime or loading on leave being taken, you may find there were different allowances that have been missed out on.
The best thing you can be doing however, is right at the beginning of the employment period and have the right agreements in place from the get go.
You organise to have employment contracts prepared and have each employee sign them when they commence to cover yourself with every type of condition that will apply. It’s a much safer option to have these than not. It is a legal document that could save your bacon in a time of stress.
Now you may think payroll isn’t that hard, I have everyone on salary. In theory, if everyone is on a salary payroll shouldn’t be that difficult but I’ve seen some come into unstuck even in the most simple systems.
So if you don’t have your employees currently on employment contracts, why not? They don’t cost that much to have put in place. I’m happy to refer you to an expert or two who can assist. It will be money well spent if you do.
And a final word, if you do get an enquiry into your payroll from any departing employee, get it looked at professionally first. If any amount has been short paid, you want to know straight up, rather than having your payroll administrator think they were doing it right in the first place.
Mistakes will happen in this area. Getting it right after a mistake is identified is the right thing to do.