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Get Prepared for Wage Theft Law Changes

The upcoming amendments to the Fair Work Act 2009 (Cth) through the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 represent a significant shift in how wage theft is addressed at the Commonwealth level. We’re here to guide you through these changes and help you prepare your agribusiness for compliance.

These changes bring new risks for agribusinesses, which often employ workers under awards such as the Pastoral Award 2020, where unique provisions require careful management. Below is a guide to help agribusiness employers prepare for compliance and avoid serious penalties.

Understanding the New Landscape

The criminalisation of wage theft at the federal level marks a watershed moment for Australian businesses, particularly in the agriculture sector. As stewards of the land and pillars of our nation’s economy, it’s crucial that we approach these changes with the same diligence and care we apply to our crops and livestock.

Key Points for Agribusinesses:

  • Criminal Offence: Wage theft will soon be classified as a criminal offence, carrying severe penalties. This underscores the importance of meticulous payroll practices and thorough record-keeping.
  • Increased Scrutiny: Expect heightened attention from regulators. Now is the time to review and fortify your wage and salary systems.
  • Compliance is Key: Ensuring compliance isn’t just about avoiding penalties – it’s about upholding the values of fair work that are fundamental to our industry.

Action Steps for Agribusiness Compliance

  1. Review and Audit Current Payroll Practices
    Conduct a thorough audit of payroll systems to ensure compliance with the Fair Work Act, modern awards, labour hire agreements, and enterprise agreements.
    Focus on areas prone to errors, such as overtime, penalty rates, and allowances under the Pastoral Award 2020.
    Compare annualised salary arrangements against award entitlements to confirm employees are not being underpaid.
  2. Implement Robust Record-Keeping Systems
    Maintain clear and accurate records of hours worked, pay rates, overtime, and allowances for all employees.
    For annualised salary employees, track their hours and entitlements to prove compliance with the award.
    Be ready to demonstrate compliance if investigated, with documented proof of adherence to relevant regulations.
  3. Educate Your Team
    Ensure all managers and supervisors understand the new legislation and its implications.
    Ensure payroll staff understand the changes to wage theft laws.
    Provide specific training on entitlements for overtime, penalty rates, and allowances.
  4. Address Underpayments Promptly
    If any underpayment issues are identified, rectify them immediately by repaying employees and updating payroll systems.
    Consider leveraging ‘safe-haven’ provisions if intentional underpayment has occurred.
  5. Ensure Clarity in Employment Agreements
    For employees covered by the Pastoral Award 2020, document entitlements, working hours, and pay arrangements.
    Regularly communicate with employees about their pay and conditions to avoid misunderstandings.
  6. Seek Expert Advice
    Consider consulting with employment law specialists to ensure your practices are fully compliant.
    Engage agricultural-focused legal experts for tailored compliance guidance.
    Schedule regular legal audits to keep your agribusiness practices up-to-date.
  7. Foster a Culture of Compliance
    Make fair pay a cornerstone of your business culture, emphasising its importance to all staff.
    Consider implementing a ‘Fair Pay Champion’ program to promote compliance on the ground.
    Integrate compliance discussions into regular team meetings, alongside operational matters.
  8. Monitor the Development of the Compliance Code
    For small agribusinesses (15 or fewer employees), stay updated on the Voluntary Small Business Wage Compliance Code.

Navigating the Pastoral Award 2020

The Pastoral Award 2020 governs many agribusiness employees, but it has key nuances that demand attention, especially in light of the upcoming changes.

No Provision for ‘Reasonable Overtime’
Unlike many other awards, the Pastoral Award 2020 does not include a ‘reasonable overtime’ clause.
This means all overtime worked must be correctly compensated according to the award rates. It’s crucial to:

  • Accurately track all hours worked
  • Ensure your payroll system can handle variable overtime calculations
  • Regularly review work schedules to manage overtime effectively

Annualised Salary Arrangements
The award allows for an annualised salary arrangement, enabling employers to pay an agreed salary that includes entitlements like overtime, penalty rates, and allowances. However, employers must:

  • Document the specific terms of the agreement.
  • Regularly review annualised arrangements to ensure they remain beneficial for both parties
  • Keep detailed records of hours worked, including start and finish times
  • Conduct annual reconciliations to ensure the annualised salary meets or exceeds award entitlements

Why Compliance Matters for Agribusinesses

Agribusinesses often face unique challenges, such as seasonal workforces, remote operations, and complex award conditions. However, these complexities will not exempt employers from the harsh penalties under the new laws, including up to 10 years’ imprisonment and fines of up to $7.8 million for corporations or $1.57 million for individuals.

Proactive preparation is essential to avoid costly mistakes and protect your business’s reputation. By understanding the changes, auditing practices, and implementing robust compliance systems, agribusiness employers can safeguard themselves and their employees under the new legislative framework.

More information on Closing Loopholes changes from The Lucas Group can be found here.
Visit the Fair Work Ombudsman’s website here for further clarification on wage theft criminalisation.

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