SmartCompany, November 15, 2019:
Earlier this week, Labor senators overcame government opposition and referred a broad inquiry into wage theft to a parliamentary committee.
The Coalition has labelled it a “talkfest”, but committee chair, Labor Senator Alex Gallacher, is hoping it will be anything but, telling SmartCompany the tax office could play an integral role in addressing wage theft beyond taxation law.
“Payroll data just provides so much clarity,” Gallacher said, revealing ATO officials will be called to give evidence.
It’s no secret that tax office data analysis is increasingly being used to inform enforcement activity, whether its employers dodging their superannuation or tax obligations.
But imagine getting a ‘nudge or warning’ telling you when you might have failed to pay a worker correctly. Such solutions are expected to be considered by the inquiry.
For the FWO, access to informed tips derived from real-time payroll data could be invaluable. After all, most employers in Australia are required to use single touch payroll (STP) reporting.
Under current laws, the commissioner of taxation can only share information about tax non-compliance with the FWO, but a legislative amendment — as seen in ditched Coalition policy from 2016 — could open the door for the ATO to start sharing well-informed tip-offs with Fair Work.
Indeed, whether the FWO will have access to real-time payroll data has been a common question at STP workshops SmartCompany has attended over the last year, as employers consider what big-data enforcement means for them.
And while there’s a range of questions about proportionate enforcement still to be asked, experts say payroll data could be a valuable tool for addressing widespread wage theft in Australia.
As ATO data gets better, it’ll “be able to take a more predictive view of players out of step with the rest of industry,” BDO partner Ben Renshaw says.
You could be forgiven for feeling as though big brother is watching — because that’s pretty much what’s already happening with superannuation compliance. But ‘tool’ is the keyword here, because STP data is still missing important information relevant to Fair Work.
Former fair work ombudsman Natalie James explains the issue of poor record-keeping and retaining accurate timesheets is an issue which remains prevalent in the small business sector.
That said, the level of visibility payroll data could provide could lower rates of systemic wage theft across the economy, which is good news for every employer abiding by the law.
After all, the last thing any business owner wants is to be undercut by a competitor (big or small) with double the staff and half the wage bill. There’s broad acceptance these laws should be followed, even among those pushing for red tape reductions.
It then becomes a question of enforcement, and there are evident reasons for business owners to be concerned here — even if fair work ombudsman Sandra Parker has repeatedly sought to clarify her office isn’t interested in pursuing well-intentioned employers for mistakes.’