{"id":2032,"date":"2025-07-23T13:33:09","date_gmt":"2025-07-23T01:33:09","guid":{"rendered":"https:\/\/www.workstem.com\/au\/blog\/auto-draft\/"},"modified":"2025-08-18T13:45:29","modified_gmt":"2025-08-18T01:45:29","slug":"top-5-compliance-mistakes-ma000020","status":"publish","type":"post","link":"https:\/\/www.workstem.com\/au\/blog\/top-5-compliance-mistakes-ma000020\/","title":{"rendered":"Top 3 MA000020 Compliance Mistakes That Cost $100k+"},"content":{"rendered":"

Staying compliant with the <\/span>Building and Construction Award<\/b> (MA000020) is not just a HR box to tick \u2013 mistakes in paying your workers correctly can lead to massive back-pay bills and even fines exceeding $100,000. Unfortunately, compliance errors are common in the construction industry. In this article, we\u2019ll cover the <\/span>top 5 compliance mistakes<\/b> companies make under the Building & Construction Award, and how to avoid them. Each mistake is drawn from real scenarios that have tripped up employers, sometimes costing them six-figure sums in back wages and penalties.<\/span><\/p>\n

Compliance with the Award is achievable with some care and the right tools. Let\u2019s dive into what <\/span>not<\/span><\/i> to do \u2013 and how to get it right.<\/span><\/p>\n

Mistake 1: Misclassifying Employees (Wrong Award or Level)<\/b><\/h2>\n

One costly error is simply getting the Award or classification wrong. This happens when companies either <\/span>misclassify the role<\/b> (assign the wrong level under the Award) or assume the Award doesn\u2019t apply when it actually does. For example, treating a carpenter or plant operator as a lower-level labourer to pay less will undercut their minimum rate. Or worse, assuming someone is not covered by the Award at all (perhaps thinking they\u2019re a contractor when legally they\u2019re an employee) \u2013 a recipe for underpayment.<\/span><\/p>\n

Why it\u2019s costly:<\/b> If an employee is misclassified at a lower pay level than their actual duties, all those underpaid dollars accumulate. Over years, this can mean tens of thousands in back-pay owed if audited. If it\u2019s deemed deliberate or reckless, Fair Work can impose penalties on top of repaying wages. Companies have been hit with big fines for not paying the correct <\/span>\u201cBuilding and Construction General On-site Award 2020\u201d<\/b> rates when they should. In one case, a Sydney construction firm neglected to pay a casual under the Award rates; the Fair Work Ombudsman took them to court seeking a $46,950 penalty <\/span>just for one worker\u2019s underpayment<\/b>!<\/span><\/p>\n

Mistake 2: Not Keeping Up with Award Wage Increases<\/b><\/h2>\n

Another common pitfall is failing to <\/span>update pay rates<\/b> when the Award rates increase each year. The Building & Construction Award rates typically go up around July each year after the Annual Wage Review \u2013 for instance, a 3.5% increase took effect from 1 July 2025. If you\u2019re still paying 2024 rates, you\u2019re underpaying everyone since the increase.<\/span><\/p>\n

Why it\u2019s costly:<\/b> Even a small percentage increase, if overlooked, adds up across many employees and many pay periods. An employer who \u201cforgets\u201d to raise wages could owe a year\u2019s worth of 3\u20135% differences to every affected worker. That easily crosses into the tens of thousands in back-pay, especially for larger crews. We\u2019ve seen companies end up owing $100k+ after a few years of missing annual raises or not applying new Award versions. The Fair Work Ombudsman may also impose fines for each breach (each underpaid employee can count as a separate breach).<\/span><\/p>\n

Mistake 3: Ignoring Overtime and Penalty Rate Rules<\/b><\/h2>\n

Construction projects often involve early starts, late finishes, or weekend work \u2013 but some companies <\/span>fail to pay the proper overtime\/penalty rates<\/b> for those hours. For instance, an employee might work a 10-hour day, but the employer pays all 10 hours at the base rate, ignoring that 2 of those hours should be at time-and-a-half and beyond 2 hours at double time per the Award. Or they schedule work on a Saturday or Sunday but pay as if it were a normal weekday.<\/span><\/p>\n

Why it\u2019s costly:<\/b> Those penalty rate differences are substantial \u2013 e.g. Saturday can be 150\u2013200% of wages, Sundays 200%, public holidays 250%. Unpaid overtime premiums accumulate quickly. This is a classic form of underpayment that <\/span>employees notice<\/b> \u2013 it often leads directly to complaints or \u201cletters of demand\u201d for unpaid wages. Once the Ombudsman investigates, you\u2019ll be on the hook for all missing penalties, plus potentially hefty fines. Even a single worker\u2019s claim (say, unpaid overtime over months) can lead to significant back-pay and a penalty for the employer \u2013 for example, failing to pay overtime to just one young labourer resulted in a $5,328 fine in another case.<\/span><\/p>\n

The Cost of Non-Compliance: Real Examples<\/b><\/h2>\n

To underscore how serious this is, consider a real example: a construction company in Sydney <\/span>ignored a compliance notice<\/b> to back-pay a worker\u2019s wages. The result? The <\/span>Federal Court<\/b> is now seeking a <\/span>$46,950 penalty<\/b> against the company, on top of ordering the wages be paid. In another case, a company that shorted a 15-year-old apprentice only a small amount ended up fined over $5,000. These cases show that even seemingly minor underpayments can snowball \u2013 not just in money to repay, but in legal penalties and reputation damage.<\/span><\/p>\n

The mistakes above \u2013 misclassification, outdated rates, unpaid penalties, missed allowances, apprentice underpayments \u2013 are often at the root of such cases. They <\/span>are avoidable<\/span><\/i>. The Fair Work Ombudsman has made it clear that claiming ignorance or saying \u201cit was an accident\u201d is not a defense for underpayments. Every business is expected to be proactive in compliance.<\/span><\/p>\n

How to Stay Compliant (and Sleep Better at Night)<\/b><\/h2>\n

After reviewing the top 5 mistakes, the solutions might be apparent: know your Award, use tools, and don\u2019t cut corners. Specifically:<\/span><\/p>\n