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What you need to know about cashies

cash in handOver the past decade electrical contractors have increasingly been under the Australia Tax Office spotlight to ensure they are paying their fair share.  The ATO has introduced several systems to reduce the black economy.

These include:

  • Electronic BAS lodgment,
  • ATO industry business benchmarks,
  • Taxable reporting payment system,
  • Single touch payroll.

These are are all aimed at ensuring companies pay the right amount of tax and that the black economy, ‘cashies’, are driven out of the industry.  Master Electricians Australia believe this is the right action as it results in less under cutting and a prevents race to the bottom.

But in an alarming trend, Master Electricians are reporting employee ‘cashies’ are on the rise. Realistically they are being caught more frequently. Could you afford to lose up to 18 per cent of your business through the actions of one employee?

In a recent case it became apparent that the employee was working six days per week, including one day a week for the employer’s customers, out of the employer’s van on a reduced hourly rate, using the employer’s consumables.

 

Read more from MEA

 

MEA estimates that this would have cost the employer approximately $65,000 in direct revenue and an estimated $240,000 in goodwill loss to the business.  You may have heard the retail term ‘shrinkage’, we call it theft.

In all states every electrician who receives payment from a customer must have a “contractors” ticket. In most cases the employee does not. And to add insult to injury employees utilize the employers van, tools, supplies, contractors ticket and even distribution networks access to complete jobs at mates rates, and no cost to the employee.

Some employees and consumers see ‘cashies’ as a victimless crime.  The criminal code, Fair Work Act, and electrical licensing in each State don’t agree with their assessment.

Tips to reduce this happening to your business:
  1. Stock take your vehicles, tools, and consumables regularly;
  2. Track vehicle movements, particularly out of hour usage;
  3. Audit usage and customer addresses to see if there is any unusual correlation;
  4. Ensure your employment contracts clearly indicate your policy on second sources of income from paid electrical work and unpaid electrical work. Is it completely prohibited, or only available upon written request and approval? MEA has a standard “Private Work” policy available;
  5. If suspicion is raised conduct a thorough investigation and seek free assistance from the MEA Employer Advice line to ensure your investigation will stand up to scrutiny of the Fair Work Commission;
  6. Inform your employees of the rules regarding what happens when caught, this may include one, some or all of the following:
    • Disciplinary action including dismissal;
    • Prosecution by police and criminal conviction;
    • Prosecution by licensing board and loss of electrical license;
    • Prosecution by WHS in the event their work injures or kills someone;
    • Work not covered by public liability or other form of insurance;
    • Work not covered by workers compensation for any incident or injury they obtain whist doing the illegal work.
  7. Inform your customers, if employees offer to complete work out of hours it is theft and that their work is deemed non-compliant and will need to be recertified at their own cost and not covered by consumer guarantees, insurance or any other government protections.

The scourge of ‘cashies’ has always been around. The government has put in place processes to reduce its effects the question is are you following suit and trying to make sure opportunities and customers are not falling through the cracks out from underneath your very nose.

 

All Master Electricians have unlimited access, no cost, to the Employer Advice hotline. One of the many benefits of being a Master Electrician. Phone direct on 1300 889 198. 

Access unlimited employer advice

Speak direct to the experts. Master Electricians have unlimited access to the MEA Employer Advice hotline.

Contact the Employer Advice Team directly on 1300 889 198.