March 26: IR’s Date Of Significance
March 26: IR’s Date Of Significance
If you’re an employer, March 26 should probably be a significant date in your diary. Changing recordkeeping requirements under the Federal Government’s WorkChoices legislation might just finally come out to bite you.
The recordkeeping component of WorkChoices has led some employers to scratch their heads in confusion and the Federal Government to consequently simplify the rules and set a compliance moratorium date of March 26, 2007. With that date fast approaching, just how prepared are Australian businesses for meeting the recordkeeping requirements?
PayGlobal, provider of HR related software decided to run their own survey to determine the readiness of NSW businesses at the end of 2006. The results were only mildly reassuring. Based on the survey of 200 NSW employers, 31 percent have updated their payroll systems while 17 percent were reviewing the changes.
But they are results that come as a major surprise to Melissa Clark-Reynolds, managing director at PayGlobal. She believes that those businesses surveyed who claim to have already reviewed the changes may not fully understand exactly what is expected of them by March 26. “I don’t believe them. I don’t believe that many employers are ready,” she says. “It’s just been a non-event, people aren’t worried about it.” Even more concerning is the fact that these results suggest a significant chunk had still not thought about the changing requirements before the New Year.
For Clark-Reynolds, a lack of awareness could come down to the Government’s deficiencies in getting the message across. For one, she believes the Government should be providing more outreach to vendors like PayGlobal, involved in software that can simplify the process. “The Government hasn’t been promoting it to us as much as they should have been,” she says. “If we as vendors are compliant, we can then also make our customers compliant.”
It’s the recordkeeping requirements for tracking hours worked by employees that has been concerning employers. Originally, employers were required to record hours worked by all employees; rules that have now been relaxed to include just those worked by casuals and irregular part-time employees. Yet recording hours worked ‘overtime’ by employees earning less then $55,000 is still required - an obligation that could see payroll departments themselves burdened with the new tasks.
The new legislation also requires basic HR changes for payroll that could cause headaches for organisations with established payroll systems. Accrued leave and outstanding sick leave must be displayed alongside the hourly pay rates, on employee payslips. Changes to official terminology may also cause confusion; for example, ‘sick leave’ has been renamed ‘Personal/Carer’s leave.’
Although the changing obligations can only increase business for PayGlobal, Clark-Reynolds fails to see their point in the broader spectrum of the Australian economy. “Once employers have a handle on it, it will add more compliance costs,” she says. “But it doesn’t add value to the company - it only adds overheads.”
But Leah Bombardiere, Senior Workplace Policy Adviser at ABL State Chamber says recordkeeping requirements have been a feature of industrial relations systems for years and the changes are not actually all that severe. “Their broader value is that such records provide a means to ascertain whether employees are receiving their correct entitlements,” she says. “The recent changes to the Workplace Relations Regulations simplify the requirements significantly; the new requirements now resemble more closely, previous standards.”
As for the readiness of Australian businesses, Bombardiere suggests that the outlook might not be as grim as what PayGlobal expects. “There’s a broad range of the levels of understanding and awareness amongst businesses about the new recordkeeping requirements,” she says. “At the conclusion of the compliance moratorium on 26 March 2007, business will have had a year to prepare, so we believe businesses should be fairly well placed.”