Businesses that make mistakes and do the wrong thing by their customers and employees run the risk of fines and legal action which can cost them plenty of dollars, but more importantly, tarnish their good reputation.
In this article, we review recent legislative changes and general obligations business owners should have in place or need to implement as a priority to avoid mistakes.
Ignorance is no defence, nor are best intentions or blaming staffing issues as the cause of a wide range of matters when it comes to protecting your employees and customers, and by default your business reputation.
Bad news always travels fast, and these days upset customers and employees are quick to jump online and share the depth of their displeasure, whether factual or not. Even genuine mistakes can damage your business reputation as no one seems quite as interested to hear your apology or how you might be making amends.
Messing up employee pay rates and superannuation payments is a matter that can elicit a maelstrom of venom. Just ask George Calombaris!
For employers who calculate pays wrongly (even accidentally) your employees and the general public are more likely to see it as ‘wage theft’ than an error.
The Fair Work Commission has no leniency either. They’ll readily issue fines of $9,390 per pay breach (for a corporation) and that’s on top of the reputational consequences you’ll suffer.
In case you missed it, Award rates of pay and the National Minimum Wage both increased by 5.75% on July 1, 2023.
Similarly, the ATO and your employees will have a zero-tolerance policy for underpayment, late or delayed superannuation guarantee (SG) payments.
Even if your intention was to pay and a technical glitch prevented it, you should expect no sympathy from the ATO and any tax deduction you may have expected will be cancelled.
To be clear, the bottom line for ongoing failure to pay your super guarantee payments on time is a 40% fine on average, but up to 200% of the super guarantee you owe.
From 1 July, 2023 the superannuation guarantee increased to 11% and it might be worth double checking your systems have been updated to reflect the new rate.
If not, you’ll need to notify the ATO. We’ve discussed late super payments and what to do in an earlier article, and you can read it here.
Business owners also need to focus on data security.
In its 2021-22 report, the Australian Cyber Security Centre revealed each cybercrime costs a small business $40,000 on average with the number of attacks equivalent to one every seven minutes.
If you haven’t taken steps to review how and what records you keep or you’ve not tightened up your general business security, it’s probably not a matter of if, but when your business and customers fall victim to cybercrime.
As those who have suffered data breaches before you can attest, there’ll be little sympathy from the public and it will be a long and costly journey to regain trust and earn back your good reputation.
For more information, please contact our office for more information on (07) 5438 8088 or email mail@corebusiness.com.au
Core Business Accountants specialise in business advice for growing and mature family-owned and small and medium-sized businesses.