Digitalisation and Automation are the answer to more than you think.
There is a multitude of reasons for businesses to make a significant investment in digitalisation and automation.
Primarily, when doing so, the objectives of businesses are to: –
- Increase Efficiency
- Cut Costs; and
- Increase Profits
However, as of the 1st of July 2019 the increased reporting requirements the ATO have put in place by way of STP (single touch payroll), has begun to create the perfect storm of compliance issues for organisations big and small. The complexities of the AWARD system that all businesses must abide by can be incredibly difficult to interpret due to ambiguous statements, lack of definitions and so on. Furthermore, even once a business has interpreted and is putting in the payroll systems required to meet legislative requirements, there is a serious challenge in policing all facets of the AWARD and the absence of a comprehensive system will leave a huge margin for error.
There have been very recent and well-publicised issues throughout Australia in recent times exposing the underpayment of wages for a lot of giant companies and, whilst it’s no secret that some of these cases may be due to mismanagement or negligence, there are a huge amount of small and medium businesses that are likely making the same or similar mistakes due to a simple inability to manage the overwhelming amount of complexity created by the fairwork.
Some of the items that need to be addressed for employing people when applying AWARD rates are: –
- Exactly what tasks will they be completing and how does that affect their classification, their level or their pay rate?
- Does their role cross over between two different levels or classifications?
- How many hours will they do regularly? Does that make them part-time, full time or casual?
In addition, you need to be able to plan their shifts?
- What time should their break be and what happens if they take it late?
- They finished late last night and are back in this morning, are there any issues around short times between shifts?
- A supervisor went home ill halfway through their shift and a more junior person needed to step up. What happens to their rate?
- A full-time staff member has done 12 hours one day but only 6.5 for the other 4 days, do they get overtime?
Along with a multitude of other potential problems.
This is where a robust and more comprehensive automation system becomes a huge benefit. Not only will you attain the results stated above but you will immediately reduce your risk of payroll errors and potential claims from staff.
You could be underpaying or overpaying staff and don’t even know it? We recently uncovered unintentional overpayments of wages of ~$420,000.00 per annum, all for the reasons above.
Fortunately, this may not necessarily present a risk due to no underpayments, however, changing structures to meet reduce to award payments would certainly ‘rock the boat’ for other reasons and potentially cause hefty disruptions to business operations.