In this short series, we have been covering some of the proposed legislative changes likely to come into effect in 2023 and today we are going to look at some changes regarding underpayments and other small claims.

Currently, the monetary cap of small claims courts for employment-related matters is $20,000.  The newly elected labour government proposes to increase this to $100,000.  Even further, the legislation enables the court to award filing fees as costs to successful small claims applications.

So one way to look at these proposed changes in colloquial terms is that both the stakes have increased and the cost of entry has decreased which typically signals an increase in the number of claims.  

So what should businesses do in response, well if you have not done one for a while (or ever) we would encourage you to undertake a comprehensive workplace relations review.  Take a look at the award coverage and classifications of your employees as well and balance their terms and conditions against their current rate of pay.  

Anecdotally, we feel that there is a rising frequency of what we would call systemic underpayments which is where businesses unknowingly fall short of their obligations rather than intentionally taking advantage of employees.  If big businesses can’t get this right, what chance does your SME have?  Reach out to someone for help.