ATO STP assistant design director Angela Lehmann said practitioners who help their clients with STP reporting could be covered under section 550 of the Fair Work Act.
The law states that “a person is involved in a contravention if they have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention”.
“I guess the answer is that it could, but what I would like to draw your attention to is, if you are registered with the Tax Practitioners Board, you should already be aware that processing payroll in any shape, way or form where you are helping the employer determine the pay-as-you-go withholding liability and/or the super guarantee liability of the employee, you are already performing that function and it is already captured within the TPB’s Tax Agent Services Act,” Ms Lehmann said on an ATO webinar.
In 2017, the Fair Work Ombudsman successfully secured first-of-its-kind penalties against a Victorian accounting firm for allegedly facilitating underpayments by its client.
Harmers Workplace Lawyers executive counsel David Bates previously said the FWO was “absolutely targeting accountants”, with practitioners facing a 92 per cent chance of being prosecuted.
“If you assist with any aspect of HR or payroll processing, if you give any advice whatsoever about pay rates, the national employment standards, modern awards, or any other fair work based internally, that could catch you,” Mr Bates said.
“If I wanted to invent words which could cast the net as wide as humanly possible and capture virtually every single thing you possibly do, these are the words I would have used. It is the most extraordinarily broadly drafted clause I’ve ever come across. Because if you think about it down into its different parts, what it’s effectively saying is that you can be held personally liable for indirectly not doing something.”
Practitioners urged to include a statement in their engagement letter, maintain documentation and seek expert advice when unsure.
“If you are an external adviser, you need to tell your clients that your services are subject to expert advice being perceived and followed, make that abundantly clear. If they want your services, then they have to accept that you are going to get expert advice, pass it on, and when you pass it on, you expect your client following,” Mr Bates said.
“Make sure everything is recorded in writing. So, if you were giving advice to your clients, you’re passing on the expert advice, please make sure you have that recorded in writing, because if it ends up in court, the best defence you could possibly have is to say, here’s my letter of engagement, here are all the times I told my client that these rights of pay appear to be wrong, here are all the times that I told them that these deductions appear to be unlawful under the Fair Work Act, here is where I emailed them and gave them a link to the Fair Work Ombudsman website and said, go and look it up yourself.
“Now, none of that’s going to get you completely off the hook, but I can tell you when it comes to it, your liability is going to be significantly reduced.”