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A costly payment error

UnderpaymentsAugust 19, 2015

A costly payment error (Last Updated On: August 19, 2015)

25 factory workers in Nambucca Heads on NSW’s North Cost have been short changed their entitlements for eight years due to a computer error, and the business owners had no idea.

The Fair Work Ombudsman (FWO) investigated the alleged underpayments after the wife of one of the workers became fed up with her husband’s grievances and sought advice. It was discovered that 11 current and 14 former employees were underpaid due to the business having initially set up their wage system incorrectly. This resulted in the ongoing miscalculations of leave accruals, leave loading and superannuation entitlements.

The wage system error failed to calculate almost 1100 hours of annual leave and about 1300 hours of sick leave. The FWO found that the workers were inadvertently underpaid a total of $45,000 between 2007 and 2015. One employee was short changed almost an entire year’s worth of annual leave entitlements.

Once contacted by the FWO the company immediately rectified the issue, however Natalie James from the Fair Work Ombudsman says this matter highlights the importance of employers taking the time to ensure they are following their workplace obligations. An error made eight years ago has resulted in the company having to find $45,000 they hadn’t budget for – which can be crippling for a small business.

If you are unsure of how annual leave and sick leave accrues contact Employsure today. We can advise on all maters relating to leave to ensure that you are providing your staff with the appropriate entitlements under the Fair Work Act. Contact us today on 1300 651 415.

Sourced from Fair Work Ombudsman Website

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