Mistakes happen, even in the best-managed businesses. But with careful attention and planning, business owners can navigate even the most complex payroll scenarios.
There’s been plenty of media attention surrounding wages in franchises. It’s also led some franchisors to reach towards compliance as a way to mitigate risk in their own business.
However, there’s less talk about the practical aspects of how a franchise owner can minimise the risk of falling foul of the workplace relations system.
If you’re a franchise owner, it’s important to pay attention to payroll compliance. Being part of a franchise system doesn’t take away your responsibility to give employees their correct entitlements to pay and work conditions. You’re the business owner, and the buck stops with you.
But for many business owners payroll management is far from being a walk in the park.
There’s a lot involved in getting wages right. To correctly calculate staff wages you need to know the hours worked, the rate of pay and whether overtime or allowances apply. There are rules about payslips, superannuation and time off, amongst others. And if you employ juniors there’s the matter of adjusting their pay rates each birthday.
The good news is that organised thinking, a little research and smart use of software can help you get payroll right in your franchise business. This can help keep staff happy and reduce your anxiety.
So what can you do to reduce errors in your franchise payroll? Here are three things:
1. Know the rules
Knowing the rules means taking time to understand the Australian workplace relations system and how it applies in your business.
On the Fair Work website you can also find out about record-keeping requirements and the right rate of pay for your employees.
One important thing to bear in mind is that award wage rates and allowances change from time to time, so you’ll need to keep abreast of these. If your franchisor doesn’t help in this area you can ask your industry association or subscribe to updates from Fair Work. If you have a larger team you might also check out one of the many outsourced HR Solutions that provide helplines and standardised employment documentation.
2. Keep accurate records
In order to pay people the correct wages you need to know the hours they have worked and what overtime payments and allowances (if any) they are entitled to.
This means you’ll need accurate records of who worked when. You can find details of the records you need to keep for each employee on the Fair Work website, together with a sample timesheet.
Speaking of timesheets, I definitely recommend you take a moment to stop and think about time and attendance record keeping. A manual process (such as completing a printed out time sheet) creates all sorts of opportunity for error so it’s a good idea to think through the risks and how you will reduce them.
For instance, how can you make sure staff record accurately the hours they work? Will a supervisor approve the timesheets? How will you authorise the hours worked? What can you do to reduce errors when the records are transferred to your payroll solution?
If all this makes your head ache, it might be smart to look into online payroll solutions.
3. Calculate wages accurately
In order to pay the correct wages to your team, you not only need to know the correct wage rates and hours worked — you also need to calculate pay accurately.
It’s probably not too tricky with a small staff team and simple payroll, but as payroll becomes more complicated, the risk of making a mistake increases.
That’s why many business owners are adding the extra security of online payroll and dedicated online payroll software.
These go beyond simply calculating payroll to include timesheets, updates to award wage rates and employee scheduling. They also include self-service systems to allow team members to manage their leave, super and bank details online.
For a small investment you can significantly reduce your risk, and the time you spend managing payroll compliance.
Did you know..?
Business owners can use add-ons to automatically calculate pay rates and record attendance to make record-keeping a breeze in your business. An add-on such as Tanda is well geared towards franchisees, with award interpretation wizards to handle complicated staff rate calculations.
Confused? One final tip
Payroll compliance can be complicated and time consuming, but some people love jobs that involve this kind of detail. If your payroll is complicated, it might be a task to delegate to a bookkeeper who has experience with the detail of compliance.
Of course, as the owner of the business you need to take overall responsibility for this aspect of your business. But that doesn’t mean doing it all yourself. In fact, it may be much better for your business if you don’t!
Are you attending this year’s National Franchise Convention in Canberra? Don’t miss MYOB’s panel discussion with Tanda, Boost Juice and Choices Flooring. The session is entitled ‘Risky business: How smart tech can protect your brand and mitigate risk in your franchise’ and will present tools to automate award interpretation, time sheeting and payroll for your business – as well as many other intuitive technology options.