XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks Online
Country Restriction: Australia only
Risk Type: Payroll Risk
Business Function: Payroll
Overview
This XBert checks whether any employee has been paid an ordinary hourly rate below the National Minimum Wage that applied on the pay run date. Underpaying staff is a serious compliance breach. It can lead to back-pay claims, penalties and reputational damage, so it is worth catching early.
What it does
For each pay run, XBert works out the hourly rate an employee was actually paid for their ordinary hours. It divides the ordinary wages paid by the number of ordinary hours worked, then compares that rate against the National Minimum Wage in force on the pay run date. Because the minimum wage steps up each 1 July, XBert always compares against the correct rate for that period.
How it works
XBert raises this alert when an employee's ordinary hourly rate falls below the minimum wage that applied on the pay run date. To keep the check accurate and avoid false alarms, it deliberately ignores several things:
It only looks at ordinary-time hourly pay. Overtime, allowances, leave, leave loading, penalty rates, bonuses, commissions, back pay, redundancy, superannuation, reimbursements and fixed or salaried amounts are excluded, because including them would distort the apparent hourly rate.
It ignores pay lines where the hours are too high to be a single pay run (for example a large figure that signals back pay or a multi-period catch-up), because dividing by those hours would produce a meaningless rate.
It ignores rates that are so low they can only be a data entry slip rather than a real wage.
Where the employee's date of birth is available, XBert applies the correct test for their age. An adult (21 or over) paid below the minimum wage is flagged as a confident breach. A junior (under 21) is only flagged if they are paid below the age-scaled junior minimum wage, because juniors can lawfully be paid a percentage of the adult rate.
If no date of birth is available, XBert still flags the underpayment but adds a note asking you to confirm the employee is an adult, because junior, apprentice or trainee rates can lawfully sit below the adult minimum wage.
XBert can also warn you in advance. If an employee is compliant today but a scheduled minimum wage increase (such as the 1 July step) will soon overtake their current rate, XBert flags the upcoming breach and tells you how many days you have to lift the rate before it becomes non-compliant.
Example/Use Case
Priya is a full-time adult employee at a cafe. In a fortnightly pay run she is paid $1,840 for 76 ordinary hours, which works out to about $24.21 per hour. The National Minimum Wage for that period is $24.95 per hour, so Priya has been underpaid by roughly $0.74 for every ordinary hour. XBert flags the pay run. The bookkeeper reviews the award, corrects Priya's hourly rate, processes a back-pay adjustment for the shortfall, and confirms future pay runs use the correct rate.
Accounting software
This XBert runs on Xero, MYOB and QuickBooks Online.
Which countries it supports
This XBert is available for Australia only, as it compares against the Australian National Minimum Wage.
Processes
Business area: Payroll. To resolve this XBert, take the following steps:
Open the flagged pay run and check the employee's ordinary hourly rate against the National Minimum Wage and any applicable modern award or enterprise agreement.
Confirm the employee's age and classification. Juniors, apprentices and trainees may lawfully be paid a scaled rate, so check which floor applies before acting.
If the employee has genuinely been underpaid, correct their hourly rate in your payroll settings so future pay runs are compliant.
Process a back-pay adjustment for the shortfall on the affected pay run, and on any earlier pay runs at the same incorrect rate.
Where a scheduled minimum wage increase is approaching, update affected employees' rates before the new rate takes effect.
Keep a record of your review and any corrections in case you need to demonstrate compliance later.
Once the rate has been corrected, mark the XBert as resolved.