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ISSUE 5
SPOOKY SIGN 1: Annualised salaries vs. modern award entitlements
SPOOKY SIGN 2: Complexities of switching payroll systems
SPOOKY The ri employee syst
Modern awards change often, which can be problematic if employers use an annualised salary arrangement instead of paying the award rates and entitlements as they arise. For instance, if an employee works overtime or is entitled to a higher duties allowance more frequently than anticipated, the difference between their annual salary and the award entitlement can be significant. To avoid compliance issues, employers should regularly review and update salary arrangements to ensure they meet current award conditions and implement a system to track changes in awards and business needs/ rostering practices then adjust salaries accordingly to prevent discrepancies from becoming major problems.
Switching to a new payroll system can be complex, time- consuming, and challenging to execute accurately. Often, the new system’s configuration might not be designed with compliance in mind, leading to issues such as mismatched pay codes between systems and confusion within the business about which codes to use and when to use them. Additionally, incorrect transfer of historical data can result in underpayments, particularly with Long Service Leave (LSL), which requires a complete history of employee entitlements. Data migration during the transition can disrupt LSL calculations, further complicating the compliance process. To ghost-bust these challenges, test the new payroll system thoroughly before going live to ensure all pay codes and data transfers are correct. Make sure historical data is accurately moved and that the system meets all entitlement and compliance requirements. Lastly, provide staff with detailed training on the new system and set up support channels to quickly resolve any issues.
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