When you are running a small business you can often feel as though you are doing so blindly, especially when it comes to employing people. For so long the business has been just yours and now you’re so successful – congratulations – that you need help. So how do you tread that fine line between finding the perfect addition to your small business, and the disaster which can come from a poorly managed and maintained employee?
- Your obligations when employing people, in terms of your reporting and business practices, and your obligations to the employees.
- What your employees are entitled to under their employment status and making sure your business can provide.
- How training and development of your employees can further develop your own skills and the success of your business.
Your Small Business Obligations for Employing People
Editors Note: Some of the details below are specific to our Australian readers. The principles outlined, however, apply universally
When you employ people in your small business you will need to be aware of your obligations from federal, state and territory laws, as well as from industrial awards and agreements, tribunal decisions and both written and verbal employment contracts. These can include:
- Making sure you pay the correct wages.
- Reimbursing your employees when they pay for work expenses.
- Providing a safe work environment.
- Ensuring you do not act in a way which could damage your employee’s reputation or cause them distress or humiliation.
- Behaving in a way which builds a confident and trusting employment relationship.
- Not providing a false or misleading reference.
- You must forward PAYE and tax instalments to the ATO.
- Making the correct payments to employees’ superannuation.
- Dealing with Centrelink to provide employment details.
In meeting these obligations you will also have to document your actions and keeping comprehensive, organised business records allows you to manage your business, and easily make business decisions. Comprehensive paperwork will also be useful if you want to sell your small business.
When you employ workers under a modern award or agreement you are also legally required to keep accurate records of time and wages, and issue payslips to each employee based on this information. These records must be kept for at least seven years, be in plain English and easy to read. Your taxation paperwork must be kept to record and explain all transactions made within your small business.
It is also your obligation as a small business owner to look after the health and safety of your employees. Therefore, you must make sure you know and understand your responsibilities under Occupational Health and Safety laws as this can help ensure your business avoids the costs and loss of time associated with workplace illness or injury.
In case of an accident, it is your responsibility to maintain worker’s compensation insurance as this protects you and your employees from financial hardship. Public liability insurance can also protect your business against being found liable to a third party for death, injury, or the loss or damage of property resulting from your business’ negligence.
Paid parental leave is an important obligation you should be aware of as a small business owner because it can see you paying up to 18 weeks of wages at the minimum rate to eligible employees. The paid parental leave scheme will come into effect from 1 January 2011 and for your small business this can mean:
- A six month adjustment period to phase in your role. During the first six months of the scheme, eligible employees will be paid parental leave through the Family Assistance Office. You can also choose to pay the parental leave yourself from the beginning of the scheme, but all employers will be required to pay parental leave for eligible long term employees who have had or adopted a child after 1 July 2011 and are claiming more than eight weeks of parental leave pay.
- The Family Assistance Office will provide funds before the employees pay cycle. The FAO will contact you to provide your bank account details and details of your employee’s payment cycle. You will not have to make parental leave payments until you have received the funds from the FAO.
- Parental leave can be in conjunction with employer benefits. The paid parental leave scheme is in addition to any paid leave you owe your employee such as recreational or annual leave, or if you offer employer-provided maternity leave.
- Lodgement of the claim is your employee’s responsibility. If your employee is eligible for paid parental leave they must lodge their claim online or in person, up to three months before the expected delivery or adoption date.
Small Business Employee Entitlements
You may be able to follow the wages and entitlements required for your employees as set out in the Federal workplace relations system, as this includes minimum workplace standards and applies to all employers and employees covered by the national system. Only some of these conditions apply to casual employees.
Or you may choose an individual agreement which sets out the wages and conditions of employment, and written contracts of employment can also be provided for employees not covered by an award or agreement. It is your responsibility to determine whether new workplace relations systems affect your small business.
Your employees can also be entitled to leave and holidays, where most workers are paid for public holidays, unless they are contract or casual workers who are only paid for the hours worked. Most workers who are not casual or contract, are also offered paid annual leave, recreation leave, sick leave and long service leave.
Training Employees in Your Small Business
Training your employees can be an investment in the future and success of your small business as it increases your productivity and profits. Your employees will also feel more motivated in their position, and this leads to higher levels of customer satisfaction.
To decide on the training which will be most beneficial to your employees and your small business, look at the skills your staff have and the skills your business needs. You can then find training opportunities to bridge this gap, and decide on a plan which allows your staff to continue to work as they learn.
You can choose a training program from a Registered Training Organisation as RTOs are authorised to provide nationally recognised training, from over 5,000 locations around Australia. Training packages are developed in line with your specific industry or enterprise.
Your small business may also be eligible to take on employees still completing their own training as apprentices. The Australian Apprenticeships program offers financial assistance to help reduce the cost of training apprentices in your business. User Choice is another government funded program which allows small businesses and their apprentices to choose which RTO will provide their accredited training, and works in conjunction with Australian Apprenticeships.
As you can see, there are a number of key considerations you will need to address in terms of your obligations to your employees, and maintaining their entitlements, however once you attract the right employees to your small business you can help them grow and learn within your business, and in turn grow and strengthen your business.