Workforce compliance in Australia covers the legal and regulatory requirements set by the Fair Work Ombudsman (FWO) that employers must follow to protect employees’ physical and mental safety and ensure they are compensated fairly for any work completed. These include the Fair Work Act 2009, Work Health and Safety Act 2011 and the National Employment Standards.
The Fair Work Act 2009 increased the powers of the Fair Work Commission and strengthened the enforcement of workforce compliance. Employers must comply with all relevant legislation to ensure their workforce is compliant. Non-compliance can result in significant penalties, including fines and jail time for severe cases.
Part of workforce compliance includes adherence to both Enterprise Agreements and the Modern Awards introduced in 2010, which ensure that employers fairly compensate staff for their work. Awards and agreements are based on industry, occupation, employment type and location and set out the minimum wages and conditions applicable to employees covered by these industrial instruments.
In addition, Modern Awards and agreements are subject to periodic review and may be updated to reflect changes in industry and employment conditions.
Workforce management software is a critical component in managing and monitoring your compliance with the relevant industrial instruments under which your business operates. Australia has over 100 modern awards and over 9,000 enterprise agreements that cover various industries, companies and specific roles within those industries.
What does workforce compliance include?
When it comes to managing a business, there are a lot of moving parts. Keeping track of all those moving parts is key to ensuring your business runs smoothly, but most importantly, ensuring you maintain compliance with Australian law. A people management solution supports your business with the following compliance regulations:
In Australia, there are strict laws around employee entitlements, including annual leave and sick leave. You must provide people with leave they are entitled to and compensate them for any paid leave they take. Part-time and full-time employees are entitled to a set amount of paid leave every year.
You need a record of how many days someone is entitled to take and how much leave they have used. People that leave your company without using all their paid annual leave are entitled to a payout. So, you need to know how much they have and how much pay that converts to.
Workforce management software calculates an employee’s annual and sick leave entitlements for specific Modern Awards and tracks how much paid leave employees have remaining. Rather than calculating or tracking this yourself, workforce management software ensures you meet your responsibilities as an employer.
By managing employee records and tracking employee absences, a workforce management solution can help to identify patterns of non-compliance and investigate potential breaches. In addition, a workforce management solution can provide employees with self-service portals to track and request leave, reducing the administrative burden on managers.
Maximum number of ordinary hours worked
All casual, part-time or full-time employees have a maximum amount of ordinary hours they can work each week. The National Employment Standards specify that the maximum number of working hours in Australia is 38 per week, excluding overtime.
If someone works more than 38 hours a week, your request for them to do so must be reasonable, and you must pay them overtime at a higher rate than ordinary hours or compensate them through higher salaries to ensure they are paid at least the entitlements as governed by the award. Casual employees do not have set work hours; you can ask them to work reasonable extra hours, but they do not have to agree to these if they do not want to work them.
The Australian Fair Work Act 2009 also specifies the time someone must take for their rest break during the work day.
The regulations around ordinary hours, overtime and meal breaks will change depending on the industrial instrument that each employee falls under. A workforce management solution can help you identify which award applies to the person and provide information on their maximum number of hours and how much pay they are entitled to for overtime.
Keeping payroll records
Part of your obligation as an employer is to keep accurate records of payroll and hours worked for up to seven years. These records must cover payments made to all employees, whether they have left the business or not, and include super contributions and Pay As You Go (PAYG) statements.
The point of keeping these records is to have them ready should your business be audited or if disputes arise. Record keeping also benefits the management layer by enabling you to find and correct any instances of non-compliance and gain a clear picture of your workforce.
A workforce management solution can support record keeping by integrating with your other business systems, storing or providing current and past information and allowing you to generate reports and analyse data to support the needs of the business.
Superannuation and tax compliance
It is your responsibility as an employer to withhold a portion of your employees’ earnings and contribute them towards the person’s superannuation fund. Part of this process is keeping the Australian Taxation Office (ATO) appraised of super withheld.
Payroll tax is another portion of a person’s wage that must be withheld and contributed to the ATO. The amount paid depends on the state or territory the business operates. In addition, each person will need to pay the Medicare levy, which will be withheld from pay the same way as payroll tax. Again, businesses need to provide reporting to the ATO and have the appropriate data available in case of any queries.
Your workforce management solution helps you comply with tax obligations by keeping track of employee hours, managing payroll and providing accurate reporting. Automating these functions not only saves time and money it also helps to avoid penalties from the ATO.
Single Touch Payroll (STP)
Single Touch Payroll (STP), introduced in July 2018, reports employee income, tax and super information to the ATO. Instead of people receiving their yearly earnings, super and tax report directly from their employer, the ATO will provide this electronically. The ATO will receive information from each pay cycle, which is how they generate the report.
STP simplifies payroll reporting and eliminates manual processes by compiling information from each employee’s pay slip every time you process payroll. So, you no longer need to complete separate reports for tax and superannuation statements.
STP also makes it easier for employees to keep track of their tax and superannuation entitlements, as you now report that information to the ATO in one place, ensuring that employees receive the correct entitlements and avoid over or under-payments.
A good workforce management solution integrates with your payroll system and automates the entire process, from tracking employee hours to preparing and submitting the required data and reports.
How Tambla supports workforce management and compliance
Australia’s stringent workforce compliance rules mean that you need a solution for interpreting modern awards and enterprise agreements, calculating complex pay rules and tracking hours worked by employees.
Our workforce compliance tools remove the complexities and cost calculations associated with ensuring your staff are paid correctly for hours worked. We support your payroll operations – ensuring your workforce is paid correctly and managed according to the employment frameworks and can provide advanced payroll systems comparison solutions to help you ensure your payroll is handled with compliance in mind.