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The Fair Work Ombudsman's compliance action in the hospitality industry has triggered some in the industry to consider the benefits of more broadly rolling out the taxable payments reporting system.
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$472k in recoveries shines light on alternative reporting systems
16 July 2018
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Last week, the FWO revealed its recovery of $471,904 for 616 workers along the East Coast after auditing businesses in breach of workplace law, including the underpayment of workers.
Speaking to Accountants Daily, All That Counts director Lielette Calleja said that while the regulation of underpayment and workplace laws was vital, the prevalence of underpayment does not necessarily stem from sinister intent.
Instead, Ms Calleja says her experience working with clients in the industry shows that some employees, especially those on government support schemes, are likely to request to be paid with cash in hand, which makes payments reporting more challenging.
“Not every business owner is intentionally ripping employees off, their hands are forced,” said Ms Calleja.
“Employees are threatening to leave, they say if you are not going to pay us cash, I can't work here because it is going to affect my other payments.
“Employers probably end up paying them a discounted rate and topping it up with cash.”
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Instead, to prevent employees from double dipping, Ms Calleja suggests adopting a system similar to the taxable payments reporting system.
The taxable payments reporting system, first implemented in the building and construction industry, requires businesses to report total payments made to each contractor to the ATO.
Ms Calleja believes that while it will be hard to directly replicate it, because employees do not always have ABNs, more needs to be done to prevent workers from cheating the system.
“I don't have a solution for it but there has to be a system where these people aren't rorting the system, they are getting cash and they are getting the government allowance,” said Ms Calleja.
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