This post is not about the cafe mentioned in the article where the headline came from. I know the cafe and given they have been in business for 30 years, they must have been doing something right.
No, this post is about the risks business face, especially small businesses, when they assume something is correct or they assume "someone" is taking care of it. And we know what they say about "assuming".
For me, the telling comment in the article was - " We use XXXXX Payroll which does the payrolls and everything ... we just pay out what they say. Holiday pays, bereavements, everything like that is calculated through them". This is also not about the payroll they used.
This is not the first time I have seen this and in most cases, the outcome is the same. While there are some dodgy employers who are actively and intentionally flouting the law, in my experience are a large number who are making these mistakes are doing through ignorance or being so overwhelmed by running their business this area does not receive the attention it deserves.
In reality, whether you are processing your payroll yourself or through a third party payroll provider you, as the employer, are responsible for the output of that payroll.
At the end of the day - Ignorance of the law is no defence.
Unfortunately, you can start a business and start employing staff without any formal training or qualifications. This is great from the point of view of having a vibrant business community but it does not help that some of these business owners don't do their due diligence related to their obligations in areas such as record keeping, reporting, payroll law, employment law etc
Ensuring that you have dotted your i's and crossed your t's will not only ensure that you do not get yourself offside with the authorities but in some ways, more importantly, you will keep your staff onside as they will be paid correctly.
So what should do about this to ensure that you don't end up in a similar situation?
Do an audit of your record keeping to ensure you are keeping the records you are required to under "The Employment Relations and Holidays Acts" and by that, I don't mean some or the ones which suit you. We have created a Guide to keeping accurate records which you can download by clicking here:- guide_to_keeping_accurate_employee_records_sml2
Ensure that your current payroll (in-house or outsourced) and time and attendance system is able to keep these records. Records have to be kept for up to 7 years and have to be readily accessible if requested by a Labour Inspector, Employee or Union Rep. If your current systems are not able to keep these record and allow you access them over time I would strongly recommend that you look at a new system.
Make sure you keep up to date with changes in payroll, tax and employment law by subscribing to sites such as www.employment.govt.nz and www.businessnz.org.nz both of who offer guidance and occasional courses on the subjects.
If you would like to discuss any aspect of this post or you would like guidance on systems which will help you stay compliant click here to chat online or book a time to chat offline.
