Australian businesses could be losing hundreds and thousands of dollars each year by ‘unwittingly’ paying excessive loadings, allowances and penalty rates based on incorrect interpretation of staff awards and agreements.
An audit of its employee awards and agreements has saved national bedding retail chain Sleep City up to $500,000 a year on payroll costs.
The audit by The Human Resources Centre found that Sleep City had unknowingly been paying its staff excessive loadings on annual leave and sick leave nationally, as well as penalty rates that were well above the award.
According to The Human Resources Centre managing director, Katherine Graham, businesses need to ensure they are correctly interpreting and applying the different awards and agreements for all categories of staff.
“Massive cost savings can come down to a matter of correctly interpreting employee awards, as in the case of Sleep City,” said Graham.
“But the bigger the company, the more unwieldy payroll can get and the harder it can be to keep on top of, interpret and implement all the legislative changes that affect various awards and penalties.
“It’s not unrealistic for many companies to expect to find some, if not similar, cost savings through an internal or outsourced audit of their payroll.”
Sleep City general manager of corporate services Chris Kouvardas said that the audit clearly had significant bottom-line effects, and allowed for better management staff rewards programs and other employee-related benefits.