FAST 15 WITH RICK KIMBERLY | RSM AUSTRALIA

Wage theft is when an employer deliberately and dishonestly underpays employee’s monies they are rightfully and lawfully entitled to. This includes wage in forms of hourly rates, overtime, penalty rates or even superannuation.

Board Member

What are the top three things you would ask or documentation you would ask for, in a board meeting to assist you in ensuring wage theft isn’t occurring in your venue?

I wouldn’t say its necessarily three things, it would quite simply be a detailed explanation outlining the level of assurance an organisation has around its wage compliance, as well as the actions and review undertaken to come to that conclusion on the level of assurance.

If wage theft occurs in your venue what are you liable for as a board member?

Directors can be held personally liable for superannuation underpayments.

- Is there a statute of limitation on wage theft?

This will vary depending on the obligation. Usually for an underpayment of wages, Fair Work will apply a 6-year review period. For superannuation, there is technically no statute of limitations, with obligations applicable back to 1992.

Could you inherit a past boards wage theft liability, or does the ATO (or other governing bodies) link it to the board that was responsible at the time for the theft?

There are certainly scenarios where you can inherit the previous compliance history of an organisation.

Before becoming a board member OR acquiring a business that has staff what should you be asking for or looking for to ensure you don’t inherit the liabilities of wage theft?

You should be looking for evidence that the business has considered their wage compliance obligations, and undertaken some level of review to gain a satisfactory level of assurance around its level of compliance.

Staff Member

What things should you be looking for on a pay slip to ensure wage theft isn’t occurring?

Checking that your hours worked have been accurately captured and reflected is a good first step.

- Who should a staff member first go to if they believe wage theft is occurring?

They should definitely speak to the business, preferably someone in HR and seek clarification.

If the allegation isn’t taken seriously by employers and is dismissed and the staff member believes there is more to it, who should the staff member contact?

The staff member may make a complaint to the ATO or Fair Work Australia but this should really be a last resort, where it is clear they are not being paid correctly.

How long does a staff member have to raise issues of wage theft?

There is no specific time limit, but an employer’s obligation for wages is usually 6 years, and for superannuation there is effectively no time limit.

Could a staff member be reprimanded for alerting authorities to the wage theft? How does a staff member protect themselves from any backlash?

A staff member shouldn’t; and any complaint they make can be anonymous.

Management Team

What processes and systems should management have in place to ensure wage theft isn’t occurring?

One which involves regular review and testing for wage compliance. But this can only be built from an initial deep dive of overall compliance in the first instance.

What type of review or who should management get to review the current processes in place to ensure correct legislation is being followed?

We recommend clients start with a technical review to ensure they understand completely what their obligations are. From here they can commence testing to ensure that what is actually happening matches what should be occurring. There is usually benefit to getting an independent view as well to ensure nothing is being overlooked.

How often should management be reviewing processes and systems in place?

We recommend at least annually.

Should management table wage related issues at every board meeting to ensure the board are informed on all wage related issues?

This will differ depending on the organisation. If there has been known issues of non-compliance it should be touched on regularly. But at a minimum it should be an annual discussion.

If you believe wage theft has occurred, by accident – what are the top three tips you would give to ensure you alleviate the reputational damage in the community?

1. Be proactive and voluntarily disclose. This will not only reduce penalties, but it demonstrates the values of the organisation and allows you to control the narrative.

2. Address the issues completely. If you do identify an issue don’t assume that is all that could possibly go wrong. Ensure you check your remaining obligations.

3. Learn from the mistake. Put in places process and controls to reduce the risk of future noncompliance, and ensure the business regularly tests these controls.

Rick Kimberley Partner Australian Global Employer Services (GES) Leader RSM Australia Pty Ltd