Why wage and record-keeping compliance matters
There are significant consequences for failure to comply
Under the Industrial Relations Act 1979 (WA) (IR Act), the Industrial Magistrates Court in Western Australia has the power to make legally binding orders with respect to:
underpaying employees
Consequences of noncompliance
Failure to comply with the requirements of an industrial instrument (an “industrial instrument” is a WA award or industrial agreement that sets the terms and conditions of employment – we'll discuss more on the next page) can lead to the imposition of penalties of up to $2,000 per contravention by the Industrial Magistrates Court.
Certain requirements under the IR Act have civil penalty provisions attached to them. This means that an employee can bring a claim against you for failing to comply with the rules and the Industrial Magistrates Court may order you to pay a penalty of up to $5,000 per contravention.
The above are just the penalties that may apply. There is still the matter of the underpayment itself.
Consequences of
If you are found by the Industrial Magistrates Court to have failed to pay your employee correctly, you will be ordered by the Court to backpay the employee the value of the underpayment.
Not only is there the cost of back-paying an employee or employees, there is also the cost of calculating the underpayment. This process often involves examining every payslip and timesheet to assess how much an employee is properly owed for the hours that they worked.
underpaying employees
In addition to the financial consequences for wage or record-keeping non-compliance, there are other consequences such as reputational damage and loss of customer and employee goodwill to consider as well. Your business is only as strong as your reputation, so ensure you protect it by understanding and complying with your wage and record-keeping obligations towards employees.
can take non-compliance to court?
Employees can seek redress for underpayments directly through the courts themselves, or they can lodge a complaint with a DMIRS industrial inspector.
Industrial inspectors have several powers to help them investigate potential non-compliance, including broad powers to enter workplaces, examine work processes, interview employees, and inspect or request copies of records. If an industrial inspector believes that non-compliance has occured, they can commence legal proceedings against the employer.
Industrial inspectors also conduct procactive compliance activities, meaning that they do not need to wait until an employee makes a complaint before investigating a workplace.
