The changes increased penalties for serious breaches of workplace laws, including employee underpayments, inaccurate records and false or misleading records. Employers need to ensure employees are correctly paid, leave entitlements are properly recorded and accurate employment records are maintained. Failure to comply can expose businesses and, in some circumstances, individuals involved in the business to significant penalties.
What do the Fair Work protections for vulnerable workers mean for employers?
Our Employment Team explores this topic
Summary
This article explains changes introduced by the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 to strengthen protections for vulnerable workers. It outlines increased penalties for workplace law breaches and highlights the importance of employers maintaining accurate pay, leave and employment records.
What changes were introduced to protect vulnerable workers?
On 5 September 2017, the Commonwealth Parliament passed into law the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Bill). The purpose of the Bill, as the name suggests, is to protect vulnerable workers (such as low paid and workers on visas) from systemic non observance of those workers’ rights and entitlements under the Fair Work Act.
What penalties and protections were increased?
- Increasing the current maximum penalty unity for individuals and corporations who knowingly contravene the law by a factor of 10;
- Tripling the maximum penalty for false or misleading records;
- Double the maximum penalty for not keeping accurate pay, leave etc records for employees; and
- Increased protections for employees and prospective employees regarding payments from employees to employers (sometimes called cashback arrangements).
What do the changes mean for employers?
Practically for employers, it means that now, more than ever, it is absolutely vital that employees are correctly paid, their annual leave properly credited and that meticulous records are kept of these (and other amounts).
What are the risks of employee underpayments?
For most businesses, a single underpayment in a single pay run has the potential to attract a penalty that may cause that business to become insolvent, and the directors of that business (if run through a company structure), to become personally liable for that omission.