Closing Loopholes Bill: What It Means

On the 4th of September 2023, the Federal Government introduced The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 to Parliament. This substantial 521-page memorandum and Bill which encompasses 28 distinct parts, which aims to reform  Australia’s workplace relations landscape.

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Over the next four weeks, the Bill will undergo debates in the House of Representatives before potentially proceeding to the Senate, where the Federal government aims to pass it before Christmas 2023. The Senate must also consider any amendments proposed by the Government, Opposition or cross bench.

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While the Bill’s objective is to close loopholes that undermine pay conditions, these changes introduce further compliance regulations for businesses that will result in the need for additional resources and investment into better compliance controls. The effect of these potential changes is still unclear to employees if the bill becomes enacted.

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Here is a concise overview of how these changes may affect employers:

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• Wage theft

Employers who deliberately underpay staff can face up to 10 years of jail and fines of up to $7.8m or three times the amount of underpayment.

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• Union rights

Union officials will have more power to conduct inspections of members' pay records without notice if there is suspicion of an underpayment.

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• Casual employment

Regular casuals will have the right to convert from casual to permanent after 6 months rather than 12 months.

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• Truck drivers

The Fair Work Commission (FWC) can set minimum rates and conditions for owner-drivers guided by an industry advisory body.

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• Same job, same pay laws

Labour hire workers can be paid the same as the host company's direct workforce in accordance with their enterprise agreement. This includes base rates, penalty rates, bonuses, overtime and allowances. Labour hire workers also have the power to petition for regulated labour hire arrangements from the FWC.

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• Gig economy laws

Gig workers on apps such as delivery food drivers are to receive minimum pay and conditions if "employee-like."

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It’s a complex situation

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Many organisations are already recognising the critical importance and complexity of payroll and adherence to regulations. They’re taking proactive steps to implement robust controls and processes to prevent variance in pay and overall compliance.

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These efforts encompass revamping payroll procedures, hiring more resources, enhancing record-keeping systems, and investing in external solutions designed to help improve controls and monitoring.

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Companies are also investing in training and upskilling their human resources and payroll teams to ensure payroll is compliant. However, due to the complexity of legislation, system and human error there’s a chance errors will slip through the cracks.

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Innovative solutions are emerging to ensure accurate wage payments

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As the federal government prepares to introduce legislation to criminalise wage theft, directors and businesses should be proactively seeking solutions that maximise their compliance investment.

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PaidRight is able to handle complex legislation and complex data within a centralised platform. The platform helps stop underpayments and overpayments and provides businesses with the ability to prove they are compliant with an independent review.

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By implementing the PaidRight platform, organisations can instill greater confidence in their board members, employees, and regulatory bodies.