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New legislation increases penalties for employers underpaying workers

New legislation was introduced to Parliament this month which would mean employers have to do a lot more to ensure that they comply with workplace legislation and instruments like Awards and the National Employment Standards.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, proposes that fines be increased from $54,000 to $500,000 for contraventions of the Act that are deliberate and systematic IR breaches. It also looks to increase the powers of the Fair Work Ombudsman to be similar to ASIC in the investigation of exploitation of vulnerable workers.

The Bill seeks to hold franchisors and holding companies responsible for contraventions of the Fair Work Act, where they knew or ought to have known of the contraventions and failed to take reasonable steps to prevent them. The Bill has been introduced after recent findings and reports that unscrupulous businesses have systematically underpaid their workers. Often these workers are international students and young people, who are unsure of their rights and entitlements.

The recent 7-Eleven scandal found that not only was there a systematic underpayment of migrant workers but also a practice of some franchisees paying their employees the lawful rate and coercing them to pay back a certain proportion of their wages. Records were deliberately falsified and designed to make it seem like the employees were being paid at a lawful rate. There were a series of cases involving franchise workers which had led to this Bill being introduced.

The impact of this new legislation is significant and could bankrupt a small business.

Ignorance is no excuse as far as The Fair Work Ombudsman is concerned and systematic breaches of vulnerable workers such as international students and young workers will be judged very sternly.

Time to get your business in order; make sure you are paying your employees within the law and giving them the conditions they are entitled to.

To help get you ready for tougher compliance legislation, HR Gurus is offering a FREE AUDIT to assess whether your business is compliant with IR instruments and legislation. To claim your free audit contact HR Gurus on 1300 959 560 and mention this blog. 

Written by Resident Guru Jessy Warn.

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