Just got Paid: But is it right?

Thank God it's Friday night

And I just (just, just, just, just)

Got paid

Get money, money, money, money (oh)

Money, money, money, money

Money, money, money, money (ooh yeah)

Get money, money, money, money

Money, money, money, money (oh-oh-oh)

Get money, money, money, money

Get money, money, money, money

Just Got Paid by NSYNC

Well, if you’re NSYNC, let’s hope they’re being paid correctly (even with those lyrics).  All organisations know that they must pay employees correctly.

With wage theft laws becoming a criminal offence from 1 January 2025, it is even more important for employers to ensure that employees are paid correctly and on time.

Wage theft legislation

As part of the Federal Government’s Closing Loopholes legislation, wage theft is now a criminal offence if an employer intentionally underpays an employee’s:

·         Wages or paid leave entitlements;

·         An amount on behalf of an employee, or for their benefit, such as superannuation payments or salary sacrifice arrangements.

There has to be an intentional act i.e. the employer has intentionally done something that intentionally results in those amounts not being paid on or before they day they were due.

Employers should be aware that if they become aware of an issue but fail to act on it, this could also be considered intentional.

While an honest and genuine mistake is not likely to be considered a criminal offence under this legislation, employers should take steps to rectify any issues that have arisen and ensure that any corrections are made in the future.  The key element is to demonstrate steps to ensure compliance.

As employees, officers and agents may also be liable, in addition to the employer, employers should take steps to ensure wage compliance.

Individuals convicted under these provisions can be liable for imprisonment and significant fines including three times the value of the underpayment.  Body corporates can also be liable for significant fines, including up to three times the value of the underpayment.

What should employers do?

Employers should ensure that their payroll system is working correctly.  This requires the correct payment rules to be entered into the system.

Australia’s employment and industrial relations laws, including modern award provisions, enterprise agreements and legislative requirements can be complex.

Firstly, are pay policies clear? Are hourly or yearly rates clearly set out, including bonuses, overtime and penalty rates? This should also involve a clear understanding of legal, award and enterprise agreement requirements and noting that this is not a set and forget – these rates do change.

If an employee is paid under an award for example, employers need to be clear about the exact payments required not only for wages, but potentially any overtime or penalty rates that may be payable, allowances, superannuation, shiftwork, higher duties, breaks, and requirements around leave and leave loading (if applicable).

Further, award and national minimum wage rates are reviewed yearly and from 1 July 2025, they have increased by 3.5%.  Similarly, minimum superannuation payments have increased from 1 July 2025 from 11.5% to 12%.

Secondly, are time records accurate? This is particularly important for those who are rostered and if their rosters change.  Does your organisation have reliable time tracking systems? These can be digital or paper based.  Are staff actually noting times they start and finish a shift, and including any breaks that they are entitled to? This should be monitored and audited to ensure this is being done correctly, and signed off by someone else, usually a manager or supervisor.

The next step for employers is to conduct a pay audit.  This usually involves checking a sample size of employees across a range of roles to ensure that pay is calculated correctly.  This can be particularly messy for employers who have staff that work a range of rosters, particularly across weekends or after hours, which tend to change each week or fortnight.

The audit may reveal for example that a particular allowance or break is not being paid correctly.  Or that deductions for tax or other voluntary deductions (such as salary sacrificing or union fees) are not calculated correctly.  You should also check that payslips accurately outline all the correct rates, additional payments, deductions and leave entitlements.

Employers will then need to implement a fix to the payroll system to ensure that the pay is corrected in the future and also determine whether there has been any underpayment in the past.  Any repayments may also need to include interest and superannuation payments.

Employers should also seek legal advice about managing any underpayment amounts and liaising with the regulator, the Fair Work Ombudsman.

This cycle should repeat to ensure that the payroll system and inputs are still correct, particularly if there are any changes to terms and conditions and/or pay reviews.

Summary

On payday, it’s important for employers to ensure pay is calculated correctly and paid on time.

If so, employees will say:

Let's get this party started (oh)

Uh-huh (yeah, oh-oh-oh)

Just got paid (just got paid), Friday night

Party hoppin' (uh, come on), feelin' right

Otherwise, this may lead to complaints, claims and potential prosecution for underpayment of wages.  And this could mean (ain’t no lie) baby bye bye bye.

Remotely Legal can assist employers and boards on all aspects of employment law, including advising on difficult people issues, reviewing policies and assisting with enterprise bargaining.  Remotely Legal can train your boards and management teams on how to deal with incidents and investigations.  Remotely Legal can also be your fully outsourced HR and people legal team.

RL Investigations, part of Remotely Legal, are a team of highly experienced and qualified lawyers and investigators, who can function as your independent, external investigation team providing fast, comprehensive and reliable investigation reports, workplace culture reviews and suggestions for organisational improvement. RL Investigations can also help your internal HR or investigation team to improve their investigations and assist decision makers in considering the right factors when making key decisions.

This blog is general advice only.  Please obtain legal advice in relation to your specific circumstances.  This blog was written by a human so please seek permission if you wish to copy any of it.