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The Fair Work Commission explains that awards contain the minimum pay and conditions for the employees they cover, that awards cover industries or job types while agreements cover employers or workplaces, and that the Fair Work Ombudsman publishes the list of awards. The Fair Work Act sets out what a modern award may contain, including minimum wages with skill-based classifications and career structures, overtime rates, penalty rates for unsocial, irregular or unpredictable hours and for weekends and public holidays, annualised wage arrangements with safeguards, allowances, leave loadings and superannuation.

The Act also requires that any allowance in a modern award be separately and clearly identified. That is why rolling everything into one salary figure without checking is risky: the allowances still exist.

The Fair Work Ombudsman's Pay and Conditions Tool at calculate.fairwork.gov.au is the standard starting point. It contains a pay calculator including allowances and penalty rates, a shift calculator, a leave calculator and a notice and redundancy calculator, and the Ombudsman states it incorporates changes to minimum rates, allowances, penalty rates and selected National Employment Standards entitlements as they take effect, while noting that where its information is inconsistent with the award, the award applies.

Start with coverage: which award, if any, applies to each role. Coverage is determined by the award's own coverage clause, usually by industry or by occupation, and a single business can have employees under more than one award. business.gov.au notes that employees not covered by an award or agreement are still entitled to a minimum wage and the National Employment Standards.

Then classify. business.gov.au points out that each award includes classifications describing roles and the experience or qualifications someone needs for that role, usually found towards the end of the award. Compare the classification descriptors against what the person actually does, not against their job title, and write down the reasoning for each person.

Then rebuild the pay for a sample period from first principles: base rate for the classification, plus allowances, penalty rates, overtime and any loading, and compare it to what was paid. Do it for a busy period and a quiet one. If there is a shortfall, get advice immediately about how to correct it rather than quietly adjusting future pay.

The Fair Work Act now contains an offence where an employer is required to pay an amount to or for an employee under the Act or a fair work instrument, engages in conduct, and that conduct results in a failure to pay the required amount in full on or before the day it is due. The fault element for the conduct and the failure is intention.

For an individual, the offence is punishable on conviction by imprisonment for up to ten years or a fine determined under the Act, or both; for a body corporate, by a fine. Where the court can determine the underpayment amount, the maximum fine is the greater of three times that amount and a set number of penalty units.

There is a safety valve for small business. The Act provides for a Voluntary Small Business Wage Compliance Code, and where the Fair Work Ombudsman is satisfied a small business employer complied with it in relation to a failure to pay, the Ombudsman must not refer the conduct to the Director of Public Prosecutions or the Australian Federal Police for a possible offence, nor enter a cooperation agreement covering it. Civil enforcement powers are unaffected.

An unfair dismissal application must be lodged with the Fair Work Commission within twenty-one days after the dismissal took effect, and the Commission can only allow a longer period where there are exceptional circumstances. The same twenty-one day limit applies to a general protections application involving dismissal.

A person is protected from unfair dismissal only after completing the minimum employment period: six months, or one year if the employer is a small business employer. A small business employer is one that employs fewer than fifteen employees, counting all employees including regular casuals and, on a dismissal, the employee being dismissed and any others being dismissed at the same time, with associated entities treated as one entity.

The Commission also notes that a dismissal is not always unfair, that an employer should not dismiss where it would be harsh, unjust or unreasonable, should not make a person redundant where it is not a genuine redundancy, and should follow the Small Business Fair Dismissal Code if they are a small business. Casuals who are not employed on a regular and systematic basis, volunteers, interns and independent contractors are not covered by unfair dismissal laws.

An HR consultant works on the system: award coverage, classifications, contracts, policies, performance processes and the records behind them. They are the right choice for the continuing work and for getting the foundations right before anything goes wrong.

An employment lawyer is the right choice once a dispute exists, once a dismissal is contested, or once an underpayment has been identified, because legal professional privilege and the ability to advise on liability matter at that point. Underpayment in particular should be handled with legal advice given the criminal offence for intentional failure to pay.

A payroll provider processes what you tell it. It does not determine award coverage or classification, and assuming it does is a common and expensive misunderstanding. The classification decision is yours; the payroll system only applies it.