Employment legislation in Australia can be complicated. Despite these complications, penalties can be significant if an employer gets it wrong. We’ve compiled 10 of the more common mistakes employers think are ok, but aren’t.

  1. Annual leave doesn’t expire at the end of the year. There’s no need to pay out all annual leave at the end of the year. It should continue to accrue and paid when employees take annual leave. Some awards allow annual leave to be cashed out, so long as the employee has at least 4 weeks remaining, it’s agreed in writing and the employee isn’t pressured to cash it out.
  2. Sick (personal/carer’s) leave also doesn’t expire at the end of the year. Don’t pay out unused sick leave as a ‘Christmas bonus’. It will continue to accrue, only to be paid out when the employee takes sick leave. There are only 2 awards where cashing out of sick leave is permitted, the Timber Award and the Stevedoring Award.
  3. You don’t need to pay staff for meetings if you provide food. It’s a requirement to pay staff for all time worked, including required training, compulsory meetings, opening & closing time, and work trials (other than a short period to demonstrate the ability to do the job, and definitely not unsupervised work for multiple days).
  4. Superannuation amounts don’t need to be recorded on payslips. Yes, they do. The accrual amount needs to be shown and updated every pay period. It’s also incorrect to only show this amount when the superannuation has actually been paid to the super fund.
  5. Only parents/guardians can ask for flexible working arrangements. In fact, carers, those with a disability, those who are 55 or older, or who are experiencing family or domestic violence (or who provide support or care to someone who is) are also able to request flexible working arrangements if they are a full time or part time employee who has worked for their employer for at least 12 months.
  6. It’s ok to make a deduction for missing cash in the till. There are VERY limited circumstances where deductions are acceptable and this is not one of them. Should you suspect someone of stealing, a performance management/termination process is a more appropriate step to take. Keep in mind, that not all ‘stealing’ is seen as equal, and a warning may be a more appropriate response than a serious misconduct, instant dismissal. It’s also quite possible that the till is short without stealing being the reason behind the loss.  It’s important to not make assumptions and instead review processes and investigate recurring till shortages.
  7. It’s ok to make deductions for broken plates, unaccounted-for stock or under-performance though. No, it’s not. These issues are all part of the costs of running a business. At best, these may be accidents that should be treated as such, and at worst, there could be performance issues that need to be addressed, but in no instance is a pay deduction appropriate.
  8. Payroll errors can be deducted in next weeks’ pay though, right? It’s not as simple as just ‘fixing it next week’. Instead, the employer and the employee will need to come to an agreement, in writing as to the reason for the over-payment, ho much was overpaid, and how the repayment will be made. If you can’t get agreement, you’ll need to seek legal advice.
  9. Trainees rates apply to juniors, with or without paperwork. Trainee and apprentice rates can ONLY be paid when a formal training arrangement is in place with the employee, through a registered training organisation.
  10. Payment in kind is fine if the employee agrees. Although it might be useful to pay employees for overtime in steaks if you own a butchers shop (for example), it’s not ok. Employees need to be paid for all time worked with money.

If you’re confused about your employment obligations, talk to our Workplace Partners about how we can help your business.


*This is general information only and doesn’t take your specific business needs into account.