Why Directors Must Self-Audit Business Wages Ahead of 2025 Legislation

Starting January 1, 2025, intentional underpayment of wages will be criminalised. This significant shift makes it imperative for directors to proactively self-audit their business wages to ensure compliance and avoid severe penalties. Here’s why this is crucial and how Subi's wage tech can help.

The Gravity of Updated Legislation

The new law will criminalise intentional underpayments, making it essential for directors to understand and comply with these requirements:

• Intentional Underpayment: Directors must ensure that all required payments (wages, superannuation, etc.) are made on time. Intentional underpayment will lead to criminal charges.
• Penalties: For companies, penalties can be the greater of three times the amount of the underpayment or $7.825 million. For individuals, penalties include up to 10 years in prison and fines of up to $1.565 million.

Whilst the vast majority of Australian businesses and Directors have never and will never intentionally underpay staff, the key takeaway of these updates is that the government is hyper-focused on ensuring everyone is paid in accordance with the law and their employment instruments making it more important than ever to manage wage compliance prudently.

The Importance of Self-Auditing

• ‍Legal Compliance: Regular self-audits ensure that your business complies with wage laws, mitigating the risk of criminal charges and financial penalties. ‍
• Financial Accuracy: Accurate wage payments are crucial for financial integrity. Self-audits help maintain accurate financial statements and prevent overpayments or underpayments. ‍
• Employee Trust and Morale: Ensuring fair compensation fosters employee trust and morale, reducing dissatisfaction and turnover. ‍
• Risk Management: Proactively identifying and correcting wage issues prevents costly legal disputes and reputational damage. ‍
• Enhanced Governance: Self-auditing reflects strong corporate governance, showing that directors are committed to compliance and financial health.

How Subi Can Help

Subi’s wage tech platform simplifies and enhances the self-audit process, making it more efficient and effective:

• Automated Data Integration: Subi automates payroll data integration, eliminating manual data entry and reducing the risk of errors. This ensures that all wage data is accurate and up-to-date.
• Real-Time Data Access: With Subi, directors can access real-time payroll data, making it easier to conduct thorough audits and identify discrepancies quickly.
• Comprehensive Reporting: Subi assists in generating detailed reports highlighting compliance issues, enabling directors to address problems proactively.
• Reduced Costs and Time: Automating the audit process with Subi reduces the time and cost involved, making it feasible to audit all employees comprehensively and regularly.
• Scalability: Subi is designed to scale with your business, making it suitable for companies of all sizes.

Conclusion

The upcoming legislation criminalising wage underpayments underscores the necessity for directors to conduct regular self-audits of their business wages. By leveraging Subi’s wage tech platform, directors can streamline the audit process, ensuring compliance, accuracy, and efficiency. This proactive approach not only protects against legal risks but also enhances overall corporate governance and employee satisfaction.

Take the Next Step

Prepare your business for the upcoming legislative changes by adopting Subi’s wage tech platform. Ensure compliance, reduce risks, and enhance your audit processes. Contact us today to learn more!

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