Login
iscover
The new Small Business Wage Compliance Code has been designed with SMEs in mind. Here’s how to update your clients.
Newsletter
What the new wage compliance code means for SMEs
31 January 2025
•
8 minute read
The new year brought with it a new Australian Wage Compliance Code, which means intentionally underpaying an employee’s wages or entitlements can now be treated as a criminal offence.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
For your SME clients, understanding this code is essential to ensure all employees are being paid properly. While it might sound intimidating to hear that incorrect wage payments could result in jail time, the truth is that this code has been created with the best interests of businesses and their people in mind.
The Fair Work Ombudsman has provided assurance that as long as businesses can show they’re operating with the right intentions, then honest mistakes in payments will be treated leniently.
For accountants, it’s a chance to offer value-added guidance to clients while helping them navigate these changes smoothly. Here’s how you can update your clients on the changes, explain the code’s potential impact, and help streamline their compliance processes.
Understanding the wage compliance code
Before reaching out to clients, ensure you have a thorough understanding of the new Wage Compliance Code.
The code introduces several changes aimed at reducing administrative burdens for SMEs with less than 15 employees, such as simplified record-keeping and clear guidelines on wage calculations. However, it also delivers stricter enforcement, with penalties for non-compliance.
Notable changes also include specific documentation requirements, updates to minimum wage and award structures, and deadlines for these changes coming into effect.
Providing your clients with reassurance and support
Not all businesses will be equally affected, so take some time to assess which clients will need the most guidance. For example, industries like retail and hospitality – which rely heavily on casual and part-time workers – may face more significant adjustments.
With the onus on small businesses to stay up to date with their requirements, through Fair Work Ombudsman resources, industry associations and compliance guidelines, there’s ample opportunity for accountants to provide support and advice as they navigate the new regulations.
When looking at the impact on your existing client list, consider:
-
The size of the client’s workforce and its composition (full-time, part-time, casual).
-
The complexity of their existing payroll system.
-
Whether clients operate in industries with unique award conditions.
From there, it will be easier to determine which clients might need immediate attention and support with the new code and what messages you need to communicate around the changes with each client.
Streamlining compliance
It’s no secret that compliance can be hard work, so streamlining processes will help your clients adhere to the code most efficiently. Tools and strategies to help your clients stay on track with their requirements include:
-
Automated payroll systems: Cloud-based payroll solutions can support wage, tax and superannuation reporting to reduce errors and save time.
-
Compliance checklists: Provide your clients with up-to-date checklists so they can easily review and compare their practices and make sure they’re meeting the new standards.
-
Regular compliance audits: By scheduling regular compliance checks, you can help clients catch any pay discrepancies early and amend with the required backpay if necessary to avoid costly penalties.
Keeping businesses on track
While the Wage Compliance Code primarily focuses on fair pay, it’s closely tied to other business obligations for your clients. For example, ensuring accurate superannuation contributions and staying up-to-date with tax requirements.
It’s not a set-and-forget situation; it’s an evolving work in progress requiring regular reviews, ongoing professional development and staff training.
As a trusted adviser, the changes offer a great opportunity to help clients become more proactive with their compliance approach and ditch any unnecessary business headaches as their processes are reviewed, rather than just another regulatory hurdle.
Dale Dixon, general manager, MYOB
You need to be a member to post comments. Become a member for free today!
