Fair Work National Underpayment of Wages Phone Audit Blitz! Risk a $54,000 fine?!
Practices risk a fine up to $54,000 per breach. Time poor practices who do not keep their documentation up to date are at risk. Paying above the Award rate is not enough. Fair Work Australia are randomly calling practice staff i.e. your medical receptionists or anyone who answers your phone, with or without the practice managers or owners knowledge to see if they are being correctly paid.
We have given appropriate feedback. Their approach is disconcerting. It may make practice staff feel their employer is underpaying their staff. We suggested direct email or letter would be a better and more discreet approach which they are currently not doing.
This is part of a recent “national awareness campaign” that could lead to an expensive and disruptive audit that could hurt morale. We reveal what they are looking for, their new tools to help you and how you can avoid creating a bigger problem for yourself, unnecessarily.
We just received a number of calls from practices this year. The owner(s) expressed concern that their medical receptionist(s) were called by Fair Work Australia in relation to a “random audit campaign”. The campaign was to find out if their practices were complying with Fair Work laws targeting healthcare practices.
Ensuring compliance is important. We welcome any “education” program. However after speaking with Fair Work on behalf of practices, we do take exception to how it is being conducted.
We found it odd at the time the Fair Work Ombudsman representative did not state who they spoke to at the reception desk and the basis of an inquiry in writing. This is very unusual and alarming. A lot of time, effort and costs can be involved in answering audit questions.
It is easy for a misunderstanding to occur. Practices face the risk of facing penalties up to $54,000 penalties for non-compliance. We believe the approach of cold calling the receptionist in relation to Fair Work compliance unnecessarily embarrasses the employer and may imply wrong doing. This can do enormous damage to staff moral if one loses trust in their employer. Trust is hard to win back. It is simply embarrassing.
Of serious concern is that this approach may not afford appropriate due process. This is an important legal concept that you should speak to your professional adviser about.
We have expressed our concerns to Fair Work. We have requested more discretion and respect to be directed at the practice owner to ensure there is no misunderstanding.
What should you tell your staff and Fair Work?
Practices need to appreciate it is hard to unsay what you say to somebody over a telephone and this can be used as evidence against the practice. This may systemically affect all staff members should an anomaly be found in just one staff record. This is how an audit normally works.
We have been told if the practice cannot promptly and correctly answer their question it may lead into a further investigation.
We have found Fair Works databases can be poor and inaccurate. Do not feel compelled to confirm anything quickly over the phone without validating their request first in writing.
The practice should request in writing what their rights and obligations are in responding to such an enquiry and seek appropriate professional advice if you are not sure. All responses should be in writing.
For the record, we have confirmed this is a national Fair Work compliance program. This is information about the program and what they are looking for in their payroll audits. This is useful especially the common mistakes. Please read this information carefully and make sure you understand exactly what they are referring to for example your signed individual flexibility agreements often are not properly worded or executed which can lead to a breach.
The campaign is called the Health Care and Social Assistance Industries campaign currently being conducted by the Fair Work Ombudsman.
The campaign aims to provide assistance in navigating the Fair Work Ombudsman’s suite of online tools and to ensure that employers are compliant with their obligations under the Fair Work Act 2009 in relation to record keeping, pay slips and employee wages. Employers in the health care industry across Australia are being contacted to participate in a brief audit of time and wage records.
Most employees in the health industry (not all) are covered by the Health Professionals and Support Services Award 2010. It can be found at https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000027/default.htm
The pay calculator is designed for employers and employees and is an easy way to identify the correct rate of pay, penalties, and allowances. It can be found at https://calculate.fairwork.gov.au/FindYourAward
My Account will keep track of the Modern Award you use, Rates of Pay that you search, save your favorite pages and give you information tailored to your needs. You can also make inquiries online to receive priority support. Create a log in here: https://www.fairwork.gov.au/my-account/registerpage.aspx
Employers are invited to check out our free and interactive online learning courses at http://fairwork.cls.janison.com/Auth/Login?ReturnUrl=/ . The online learning centre provides strategies to help supervisors and managers:
- have difficult conversations in the workplace
- hire employees
- promote good employee performance and address underperformance.
These are just a few of the resources available, but the key message to employers would be to refer to the website to check things as they arise are there are several resources that may be helpful. They are always welcome to call the infoline 13 13 94.
So what are the penalties for doing nothing?
I think this best summarises your options. Owners, CEOs and practice managers, supervisors are personally affected. Doing nothing is not an option. Is it a question of not if but when you get audited or a staff member makes a complaint. Is it worth the risk?
From 31 July 2015, the maximum penalty for each breach of the Fair Work Act 2009 (Cth) (FW Act) has risen from $51,000 to $54,000 for a corporation and $10,200 to $10,800 for an individual.
This increase has a wide effect, particularly as there is a growing trend in adverse action claims to name all of the people “involved” in the contravention, in addition to the company. This may include the human resources manager, line manager, general counsel, or a director or officer of the company.
The change is a result of a recent amendment to the Crimes Act 1914 (Cth) (Crimes Act), which has increased the value of a penalty unit from $170 to $180.
What should I do next – Checklist
1.Check you are compliant!
Whether you are being audited or not, make sure you are compliant. See our checklist below. If you are being audited, ask for any requests for information in writing as above and review the Fair Work information on their website to ensure compliance;
2.Can you clearly explain your arrangements without a professional adviser?
Understand your past and current structures and employment arrangements or ask your professional adviser to respond on your behalf;
3. Signed up to date documentation is king!
Practices can purchase employee/individual flexibility employment and provider template agreements from us to assist with compliance. Completing correctly individual flexibility agreements can be a tricky process if you are not clear about the process the Awards and the NES rules seek professional advice;
4. Prove in writing you say what you do!
Ensure all your administration systems and paperwork audit trail are compliant. Your employment and provider agreements must demonstrate this is what is happening in your payroll systems. See point 8;
5. Be careful how you share information!
Be wary about identifying and submitting information to Fair Work that may trigger an audit due to a simple misunderstanding. It is a legal system and not a justice system. Practices do not have the resources to fight an audit nor insurance coverage. This may also trigger Federal Taxation audits so be careful you cannot “unsay” verbal or written statements on any electronic or hardcopy medium. This could be used against the employer or employee. See professional advice if you are not sure;
6. Stay calm! Ask the right questions! Get it in writing….
You need to make sure you are asking the right questions in order to get the right answers. Make sure you receive any advice in writing including Fair Work. Verbal telephone calls will not save you and leave you open to misunderstanding;
Fair Work information is for general purpose only often we have found it is not up to date or could clarify issues better or hard to find. For example, practices that do not have individual flexibility agreements in place (see Point 3: Our Template Agreements) may still be found guilty of underpaying wages, even if they pay their staff above Award rates.
7. Fair Work On Line Training and Assessment Tools – A great idea?
We believe this a great idea. However, we express concern about the need to have a used identifiable log in, which may attract an audit. So please keep this in mind and ask in writing for further information or use an anonymous log in if you are able to. Also keep point 6 in mind.
8. Purchase Template Agreements – Employment Kit
To simplify any concerns consider purchasing our template employment kit and service agreement templates that you can customised to your needs see https://www.healthandlife.com.au/what-we-do/services-peace-of-mind-solutions/specialised-services/products-for-medical-practices/templates/
We have taken the heavy lifting out of documenting the most important part of the process you need or should have undertaken.
9. All too hard? Not sure where to start?
Contact us at Health and Life for a free no obligation chat at firstname.lastname@example.org or if you want to purchase our employment and provider agreement templates. We are presenting on these issues and more see our Seminar events starting February this month see https://thebusinessofhealthcare.com.au/conference-catch-up-2-2/ .
Chartered Accountant, Chartered Tax Adviser, Registered Tax Agent, Former AGPAL Surveyor 10 years of service
David Dahm is CEO and founder of the national medical and healthcare chartered accounting firm Health and Life and global Founder and CEO of the not for profit project the International Healthcare Standards and Ethics Board (www.ihseb.org)
After a serious work related car accident in 1989, and nine operations later I continue to be a patient and provider advocate. I enter my third decade as a national Chartered Accountant for Medical and Healthcare practices in Australia. I am a former 10-year Australian General Practice Accreditation surveyor. I come from a medico family. I have served on the AAPM national Board and was the inaugural national Chair of the Certified Practice Manager CPM post nominal. I continue to provide accounting tax and practice management advice to many practices all over Australia.
You know who you are and I thank you for this real honour and privilege to serve you and your community through you. Note, I am not a lawyer please seek appropriate legal and accounting advice. This information is for general information and discussion only.