Retailers call for more education on wages after Fair Work report reveals SMEs confused on pay

Australian retailers have criticised the findings of a new Fair Work Ombudsman report revealing 26% of 1,800 businesses surveyed were incorrectly paying their employees, saying the result implies SMEs are confused about current wage rates and industrial relations law.

The Ombudsman report found that while some businesses were incorrectly paying staff deliberately, there were several employers who were confused about how current wage rates work and how the transition to new awards affect pay.

Australian Retailers Association executive director Russell Zimmerman told SmartCompany this morning the Government needs to do a better job of informing businesses about correct rates of pay and breaking down the law into easy-to-understand terms.

“There are a very large number of retailers that are obviously having difficulties understanding the current law. It shows there is confusion, and when you look at the report, you see examples such as a florist with only four employees.”

“We have to realise it’s the SMEs that are being affected here. Major retailers have HR departments to figure all this out, it’s the small SMEs that are really having the trouble.”

Zimmerman says about 50% of the calls made to the ARA by employers are about HR or industrial relations matters.

“We’ve got plenty of employers calling us up asking for assistance. This is not an area they are used to, and they need further clarification around this complex requests.”

The Fair Work report shows that 26% of 1,866 employers recorded a total of 653 contraventions, primarily relating to underpaying wages, failure to conform with payslip requirements and failure to adhere to time and wage requirements.

More than half a million dollars in back pay has been awarded to more than 750 workers across Australia, with 41% of total underpayment instances coming from New South Wales.

There are 224 businesses still under investigation.

“Many employers underpay as the result of a lack of information or they make mistakes interpreting the information they have,” Fair Work Ombudsman Nicholas Wilson said in a statement.

“Our proactive work helps improve understanding among employers of their workplace responsibilities.”

But Zimmerman says the Ombudsman should be doing more.

“We need to make sure businesses are paying staff correctly, but the Government needs to offer more support. There is a desperate need for ongoing education, especially for retailers.”

Zimmerman suggests the Government could even look at funding industry bodies, such as the ARA, which are already producing educational content for members.

“We’re already doing things like webinars and seminars, and we’re answering many enquiries. We could use funding to educate our members.”

In addition to underpaying employees, the Ombudsman report found some businesses are only employing adults, unlawfully requiring staff to make purchases in-house and deduct those from wages, while some businesses are also expecting staff to perform set up and closing duties outside trading hours for no extra pay.