The Federal Government’s reforms will aim to protect vulnerable workers making it more important for businesses to review the way they manage the risk of underpayment and worker exploitation. The four main points you need to know about the amendments are:

  1. Higher penalties for serious contraventions

A new category of ‘serious contraventions’ will see maximum penalties increased to $630,000 for a company and $126,000 for an individual. These significantly higher penalties can be imposed on companies and individuals involved in repeat instances of underpayment or other unlawful conduct carried out by policies or practices that are inconsistent with workplace laws.

  1. Franchisors and parent companies are directly liable for underpayments

New offences will make franchisors and parent companies directly liable for underpayments and other breaches of the Fair Work Act by their franchisees and subsidiaries. These will apply in cases where the franchisor or parent company knew or should have reasonably known of the contraventions and have failed to take reasonable steps to prevent them.

  1. Closer eye on record keeping

Changes to penalties for failing to keep proper records will double to $63,000 for companies and $12,600 for individuals. Employers should review their record keeping procedure and ensure they are complying with obligations under the Fair Work Act.

  1. Prevention of cash back arrangements

New laws will strengthen existing restrictions on employer’s who make unlawful deductions from employees’ pay. This change will stop employers from demanding money from prospective employees as a condition of employment or engaging in unlawful cash back arrangements with current employees.

 

The consequences for non-compliance with these amendments will be more significant than ever, making it important to consider any gaps in compliance systems and ensuring appropriate measures are in place to respond to these changes.

 

For more information on the Fair Work Act Amendments contact us on (08) 9316 9896 or enquiries@processworx.com.au.

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