If compliance issues are becoming apparent in your business, engage specialists, preferably external, to conduct a compliance audit.
Compliance has become more than just a checkbox conversation; it’s a business imperative. With Fair Work recently recovering $473 million in employee underpayments, employers have critical stakes to avoid compliance issues with the many different legal obligations owed to employees.
Over the past few years, legislation has changed, meaning businesses may not have monitored necessary compliance areas such as:
- overlooking outdated contracts,
- maintaining policies that are no longer relevant, and
- failing to make necessary wage adjustments in employee contracts.
Businesses experiencing numerous complaints, particularly regarding payroll system inconsistencies or employee payment discrepancies, should consider a compliance audit.
What other issues indicate a business needs a compliance check?
Common red flags that indicate your business needs a compliance check
The Importance of Regular Audits
Let’s begin with the most obvious concern – when businesses fail to conduct regular audits. If your business avoids compliance checks at necessary intervals, it can lead to unaddressed issues and increase legal, financial, and operational risks.
Award Coverage Challenges
The second common concern in wage compliance is the uncertainty around award coverage. This issue can arise when a business has new hires, enters new industries, each of whom may be covered by different awards.
High Employee Turnover
Another significant compliance ‘red flag’ businesses may encounter is a high turnover rate within their payroll and HR departments. This high attrition could indicate that there are issues within the HR and payroll team, which could relate to compliance issues. In addition to this, leaders may be unaware of the depth and complexity of compliance requirements.
The Impact of Poor Payroll Practices
Further to this, ill-equipped payroll teams may be dealing with inaccurate employment contracts, outdated policies, misclassified employees, and payroll system errors. It is essential for leaders to provide strong support and resources to HR to ensure they feel confident and comfortable to highlight compliance issues.
Poor payroll/HR practices expose businesses to civil penalties, potential investigations/prosecution, and damage to its brand reputation.
Overcoming Compliance Issues: An Expert-led Compliance Review
If compliance red flags are becoming apparent in your business, it is essential to engage specialists, preferably external, to conduct a compliance audit. This will ensure that the current systems are set up to be efficient, accurate, and free of unintended payroll errors.
By using an external team of specialists, businesses can benefit from confidential reviews and receive ongoing support for regular internal checks throughout the year.
Our compliance experts are highly skilled and possess a deep understanding of the complexities of the modern award system.
Get a complete check for your business, or select from our list of specific compliance checks:
- Wage and Payroll Compliance
- Employment Contract Compliance
- Industrial Instrument Compliance
- Policies and Procedures Compliance
- Workplace legislation Compliance
Meet our compliance specialists
Kirsten Hartmann, Principal IR Consultant
Lorna Reid, Workplace Relations Advisor
