The Modern Awards have increased the minimum wage for many different types of workers and most employers are unaware they may be paying below the required amount.

The risks of not complying with the Fair Work Act are far too high and therefore business owners must keep on top of the legal requirements that it embraces.  The Fair Work Ombudsman has made it quite clear that lack of awareness will not be accepted as a defence if an employer is found to be in breach of their legal obligations.

Recent cases emphasise the significance of not complying with the law:

  • The under payment of $20,000 resulted in a fine of $148,000 to the company and a personal fine of $29,700 to the director. The director claimed he was unaware of the underpayment as he had others looking after the payroll. His line of defence was rejected.


  • Based on random inspections of about 2,000 retail companies, FWA found that 755 retail employees were underpaid. Most of them were in New South Wales which accounted for 41 per cent of total underpayment. FWA asked the erring firms to reimburse the 220 NSW underpaid workers a total of $237,788.


  • Besides retailers, a Federal Magistrates Court also fined a Hungry Jack’s operator $46,200 for underpaying 180 workers over four years. The court also ordered Chamdale to pay the workers the proper minimum hourly rate, overtime and public holiday penalty rates, as well as annual leave entitlements and laundry allowance.


So, how do you, as a business owner make sure you are meeting your obligations to your employees? Make sure each of your employees is being paid, compensated and working according to the conditions of the correct modern award. How do you do that? The following is a quick reference guide to check the correct Modern Award:

What industry does your business fall under? Some industries were once unionised and have a very specific award that covers many of the different functions performed under it. This makes finding the right payment, conditions, entitlements and hours much easier.

What functions do your employees perform? Some industries as stated above such as Architects have a specific award, but not everyone that works at an Architecture firm will fit under a clearly defined function. An office worker in administration for example would potentially not come under the Architect Award nor would an interior designer.

Go to:

You can search under a number of criteria to find the correct Modern Award for your employees.

An award is a legal document that sets out minimum wages and conditions for an industry or occupation. Awards cover things like rates of pay, overtime, penalty rates and allowances. The conditions in awards apply on top of the minimum conditions in the National Employment Standards.

The National Employment Standards are 10 minimum workplace entitlements in the NES which can be found


Casual employees now also have provisions under the NES and FWA that were not previously available, so it is important as a business owner to know what these changes are and comply with them.

Casual employees must have superannuation and tax taken care of in your pay system otherwise you will be in breach of both FWA and ATO.

Contractors must be clearly contractors and not employees. A simple guide for being sure can be found on the ATO site, but an easy way to tell is to ask yourself, do you think of them as employee, if the answer is yes, then they most probably are an employee. click on this link to determine if you have a contractor or an employee.

If you have a pay role team, finance department of personnel department it would be very wise to test their knowledge of the changes to Awards, Pay rates, Conditions and minimum entitlements. As the business owner you are held to account if any breach is found and you are the one that will be fined, have to pay compensation, so it is imperative you as the owner make sure you know if your business is complying.

Other factors that are taken in to account in consideration of work fairness are: terms and conditions of employment and or letters of offer as well as position descriptions or their absence. It really pays to make sure you as the owner can confidently prove all of these things are in place and are known to all your employees by way of their signature stating they have read and understood these documents and agree to be bound by them.

In cases of unfair dismissal as an employer you will also need to ensure you have policies in place to support any actions you take as well as written evidence to support any decisions or actions you take with an employee. I would highly recommend you take the time and initiative to consult a human resources and or workplace law specialist to have all of these things in place at the very beginning before employing anyone, but if you do not already have them in place it is not too late to obtain them and inform all of your team and get signatures in place.

A little investment and time now, could save you thousands of dollars and lost time in future.

By Sonia King

King Consulting HR