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Big spender: back-pay battles a warning to employers

12 November 2013

Employees in NSW's Central Coast were reimbursed a total of $63,700 in wages and entitlements after workplace investigations conducted by the Fair Work Ombudsman (FWO).

The majority of the missed payments came about as a result of employers incorrectly classifying their staff, leading to underpayment. A childcare worker in Gosford received the largest repayment - a total of $17,900. Because her employer had misclassified her position, she was paid under the minimum hourly rate between 2009 and 2012.

Other sizeable compensations went to an administration officer in Wyong, who was also paid under the minimum rate between 2011 and early 2013 and received $12,700, and a manufacturing manager who collected $7,600 in missed redundancy pay dating back to 2012.

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According to Natalie James of the Fair Work Ombudsman, these cases serve as reminders of the importance of appropriately classifying and paying workers.

"Even a small error in an employee's base hourly rate left unchecked over time can result in a large underpayment having to be rectified, as occurred in these cases," she said in a statement on 6 November.

"No business wants to face a big bill for back-payment of wages they weren't budgeting for."

The affected workers were paid all the money they were owed without the need for further action, following the FWO's consultation with the businesses involved.

"Our preference is always to work with employers to educate them and help them voluntarily rectify any non-compliance issues we identify," Ms James explained.

Remunerating employees with the correct pay, in a timely manner, is an important obligation for any business in Australia.

Employers should ensure those responsible for human resource management within their organisations are properly trained to make certain employees are receiving their entitlements including leave and pay. Employee relations training for those new to their HR responsibilities can provide the knowledge and skills to help organisations remain up to date and compliant.

An HR consulting firm can also conduct an audit of contracts and relevant documentation to highlight any issues to be addressed such as underpayment or award entitlements.

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