Business Advisory

Navigating payroll compliance: A guide for franchise owners

Sarah Eltakchi
3 April 2023
4 min read

03 April 2023

Payroll is an essential aspect of any business, but it can be particularly challenging for franchises. Franchise owners must contend with a host of unique risks, costs, and other challenges that can make managing payroll a daunting task. In this article, we will explore some of these challenges and highlight some recent Fair Work Australia (FWA) court proceedings that shed light on the importance of complying with payroll regulations.

Ensure compliance with laws and regulations

One of the biggest challenges that franchise owners face when it comes to payroll is ensuring compliance with relevant legislation. There are numerous laws and regulations that govern payroll, including minimum wage laws, overtime laws, and tax regulations. Failing to comply with these laws can result in costly fines and legal action.

In 2021, the Fair Work Ombudsman (FWO) took legal action against several franchises for underpaying their employees. In one case, the FWO took action against G & Z United Pty Ltd a Subway franchisee for underpaying six workers by almost $20,000. The franchisee was fined $65,000, and the FWO ordered them to backpay the affected employees in full. This case highlights the importance of complying with minimum wage laws and ensuring that all employees are paid fairly.

Effective management of multiple sites

Another challenge that franchise owners face is the complexity of managing payroll across multiple locations. Many franchises have multiple stores or outlets, each with its own payroll needs and requirements. This can make it challenging to keep track of hours worked, calculate overtime, and ensure that all employees are paid accurately and on time.

In 2020, the FWO took legal action against a Domino's franchisee for underpaying 20 workers by over $12,000. The franchisee was found to have failed to keep accurate records of hours worked by employees, which made it difficult to determine whether they were being paid correctly. The franchisee was fined $240,000, and the FWO ordered them to backpay the affected employees in full.

This case highlights the importance of keeping accurate records and ensuring that all employees are paid for the hours they work.

Keeping on top of rates and record keeping

In addition to compliance issues, franchise owners also face other challenges when it comes to managing payroll. These may include managing multiple pay rates, dealing with payroll taxes, and ensuring that all payroll information is kept confidential and secure.

To address these challenges, many franchise owners turn to professional payroll services or software. These services can help to streamline payroll management, reduce errors, and ensure compliance with relevant legislation. However, it is still essential for franchise owners to be aware of their payroll responsibilities and to ensure that they are complying with all relevant laws and regulations.

Payroll management for franchise businesses

Managing payroll for franchises can be a complex and challenging task. Franchise owners must navigate a range of risks, costs, and other challenges, including compliance with relevant legislation, managing multiple locations, and dealing with payroll taxes. Recent FWA court proceedings highlight the importance of complying with payroll regulations and ensuring that all employees are paid fairly and accurately. By taking steps to address these challenges, franchise owners can ensure that their businesses run smoothly and avoid costly fines and legal action.

The Findex Managed Payroll team can offer your franchise immense benefits by giving you back more of your time and resources to focus on the areas that provide value to your customers. Here are some guaranteed benefits of working with Findex's Managed Payroll team:

  • A team of experienced and dedicated payroll specialists in Australia

  • Access to over 100 offices around Australia for easier collaboration

  • Access to a team of financial experts, including tax consulting that can reduce compliance risks

  • Clear, value-driven service with the ability to adapt to your business's changing circumstances, and more.

If you’re ready to delegate the responsibility of managing your payroll to a dedicated partner, save money, and boost your bottom line, we invite you to partner with Findex today and start reaping the benefits. Find out more about Managed Payroll or contact our specialist team.

The views and opinions expressed in this article are those of the author/s and do not necessarily reflect the thought or position of Findex Group Limited.

Author: Sarah Eltakchi | Partner

Sarah has been supporting business owners to achieve their goals for over 15 years. Sarah’s approach is all about providing you with a plan for the future and helping you navigate your way to identify and reach your goals. Working alongside her clients through out every stage of the journey, implementing financial and operational strategies, accounting and tax compliance, guiding, mentoring and providing direction at each stage of the business’ life – from startup, through the growth phase, and eventually to succession.