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5 tips to ensure franchisees pay staff properly

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Franchisors must be certain that their franchisees are paying their staff properly, referring to the correct award and have interpreted the payroll legislation properly. When big brands lose sight of what their franchisees are doing it can cause severe and irreparable brand damage.

Franchisors must ensure their franchisees are paying staff properly.  Tracy Angwin, CEO and founder of Australian Payroll Association and director of Payroll HQ shares her top five tips and highlights some red flags franchisors need to look out for.

5 ways that help franchisees pay staff properly

1. Include a clause into the franchisee agreement

As a franchisor you want to be certain that your franchisees are doing their payroll correctly. To mitigate any risks involved, a franchisor can make it a condition of the franchisee agreement that all payroll is done through head office.

2. Use an external payroll provider

If you want to ensure that all your franchisees are operating properly and doing their payroll correctly you can outsource to a fully managed payroll service. An external service provider such as payrollHQ.com.au can help with this and work closely with your company to ensure your payroll is produced on time and in accordance with legislation.

3. Audit subcontractors working for your franchisees

Franchisors have an obligation to make sure that their franchisees and any sub-contractors that work for them are being paid properly. They require franchisees to regularly submit their payroll awards to them so that they can perform a payroll compliance audit. This isn’t for tax reasons, rather it is to assure the franchisor that the franchisee has interpreted the award correctly.

4. Choose the correct payroll technology for your industry

Having payroll technology that fits the purpose of the company is vital. When companies try to monitor attendance data, they need to ensure that the technology such as finger prints or facial recognition software is appropriate for the job. For example, if you are a swim teacher working at a company where attendance data is gathered through a finger scanner this can be problematic as your finger print can become unrecognisable after spending a couple of hours in a pool.

5. Check your payroll professional is properly qualified and trained

Franchisors need to make sure that their payroll professional has the appropriate qualifications. The main problem that I often see in companies is a ‘set and forget’ attitude.

Payroll professionals need to maintain their training requirements by attending end of year conferences and keep up to date with all the current payroll legislation. For example, the Quarterly Superannuation Contribution Cap changes every year, and this information and any other changes to thresholds can only be learnt at training sessions.