As of January 1, 2025, intentional underpayment of wages or entitlements has become a criminal offence in Australia, with severe penalties for non-compliance. Under the Fair Work Act 2009, this new legislation imposes hefty penalties, including fines of up to $7.825 million for companies and up to 10 years in prison for individuals found guilty of intentional underpayment. The Fair Work Ombudsman (FWO) will investigate suspected offences and refer them for criminal prosecution.
For hospitality businesses, which often face high employee turnover and complex scheduling, compliance is more critical than ever. This blog explores the challenges faced by the industry and how Workstem can help you stay compliant and efficient.
Understanding the New Laws
Under the Fair Work Act 2009, intentional underpayment includes knowingly paying less than the required minimum entitlements or failing to pay an employee on time. The FWO provides resources to help businesses understand their obligations and maintain compliance.
Challenges Faced by Hospitality Businesses
Complex Payroll Management
- Time-Consuming Adjustments: Manually adjusting timesheets for early arrivals, late departures, and other discrepancies can take hours each day. For a manager overseeing 15 employees, manual adjustments can take up to 1.5 hours daily, totalling nearly 30 hours per month—equivalent to almost 4 full workdays.
- High Turnover and Administrative Burden: Rehiring temporary workers, storing their files, and managing YTD/PAYG records can be a logistical nightmare.
- Risk of Non-Compliance: Manual processes increase the risk of underpayment and non-compliance with labour laws, leading to potential legal issues.
Regulatory Complexity
- Regulatory Changes: Fair Work and ATO regulations are difficult to navigate and change frequently, resulting in significant compliance risks for businesses.
- Compliance Costs: Despite existing payroll systems, Fair Work has collected over $1 billion in remediations over the last two years, proving that today’s systems are often inadequate.
Inefficient Employee Record Management
- Data Inaccuracy & Errors: Without a robust HRMS, employee records are often stored in spreadsheets or scattered digital documents, leading to errors in payroll processing and tracking employee benefits.
- Difficulty in Accessing Records: Retrieving records manually is time-consuming and can slow down decision-making.
- Non-Compliance Risks: Maintaining up-to-date employee records is crucial for compliance with labour laws. Without an HRMS, tracking mandatory information becomes a challenge.
How Workstem Stays Compliance and Efficiency
Workstem offers a comprehensive solution tailored for the hospitality industry, helping businesses navigate the complexities of the new wage laws while streamlining payroll management.
Automated Timesheets and Compliance
Workstem’s hospitality payroll solutions automatically calculate working hours using customisable attendance rules, ensuring accuracy and Fair Work compliance while eliminating manual errors. Employees can clock in/out using various methods (e.g., Bluetooth, GPS, QR codes, facial recognition), ensuring accurate payroll processing and compliance with Fair Work regulations.
Effortless Employee Record Management
Workstem allows businesses to archive employee records instead of terminating them, retaining crucial data like YTD balances and PAYG tax information. This approach minimises administrative burdens and ensures a smooth reactivation process when employees return.
Seamless Integration with Accounting Software
Workstem integrates seamlessly with popular accounting platforms like Xero and NetSuite, eliminating manual data entry and reducing administrative work. Businesses only pay for active employees, saving on subscription costs.
Protection Against Legal Risks
Workstem’s compliance features help businesses avoid the risk of underpayment offences. By automating payroll calculations and ensuring accurate wage payments, Workstem provides a safeguard against legal penalties.
Real-World Impact: Case Study
Previously, one company spent three days each week on payroll processing, a process plagued by inefficiency and errors. With Workstem‘s advanced automation solution, they slashed processing time to just one day—a 66% improvement. By automating timesheet adjustments and integrating payroll with existing systems, the team saved over 20 hours monthly, reduced errors, and achieved unparalleled efficiency and accuracy.
Conclusion
In an era where compliance with labour laws is more critical than ever, Workstem’s hospitality payroll solutions deliver a reliable, efficient, and cost-effective payroll management system. By automating payroll processes, centralising employee records, and integrating seamlessly with existing systems, Workstem enables businesses to save up to 50% in payroll processing time, reduce administrative costs by 30%, and ensure 100% compliance with Fair Work regulations.
Ready to streamline your payroll, ensure Fair Work compliance, and protect your business from costly penalties? Explore how Workstem’s payroll management software can transform your operations and keep your business ahead of regulatory changes.
Read More：
Updated Hospitality Award Rates: What You Need to Know
