Payment of Wages – Company Directors Liabilities

Payment of Wages – Company Directors Liabilities

A couple of recent examples show how important it is for company directors to be aware that they may be prosecuted for any underpayment of wages which occurs on their watch.

In the Federal Circuit Court an assistant at a delicatessen argued that his employer was guilty of the following:

  • not paying the required minimum wages
  • not paying his allowances or overtime
  • failure to make superannuation contributions on his behalf
  • failure to provide him with payslips
  • failure to pay his accrued annual and long service leave when his employment ended.

Importantly the Judge accepted the employee’s argument that the company’s sole director knowingly contravened the federal statutes.

An order of compensation payment is still to come.

In a separate case, the Federal Circuit Court has found a company director liable after he failed to act on an order for his company to repay an underpaid employee.

The Judge granted the Fair Work Ombudsman application for a declaration that the director breached the Fair Work Act by failing to ensure that an employee was repaid $4,222.05.

The judge said the director was directly responsible for the failure to pay the employee his correct entitlements. He was also deemed responsible for the company’s subsequent failure to abide by the resulting compliance notice.

The lesson here for any company director is to ensure your business is totally compliant with the relevant wages and conditions prescribed by the Fair Work Act 2009.

HR Central can provide that peace of mind by conducting an audit of your existing payroll set up. We can advise you of your compliance level and assist you in amending your operations to ensure you are paying the rights wages. To provide further comfort, we have a cloud based service delivering constantly updated terms and conditions consistent with the requirements of the Fair Work Act 2009.

Michael O'Shaughnessy

Michael is a specialist in all things HR. With vast HR experience in the USA and Australia, Michael brings a wealth of knowledge and advice to HR Central. When he's not blogging for HR Central you can find him out for dinner in one of Melbourne's newest restaurants.

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