Take action to fix the new payroll burden – write to the Minister today

The recent Federal Court ruling in the Woolworths Group Ltd v Fair Work Ombudsman case has created an impossible payroll burden for small businesses.

The Court ruled that:

• Employers can no longer use set-off clauses to balance overpayments in one pay period against shortfalls in another.

• All entitlements must be paid in full in every single pay period.

• Even carefully drafted contracts may not protect against claims.

• Employers must keep detailed records for every pay cycle, or face compliance risk.

For small businesses – without payroll departments, HR teams or lawyers – the ruling is unworkable. It increases costs, red tape, and legal risks, and makes annualised salary arrangements almost impossible.

Why this matters:

• Small businesses could face costly backpay claims if each pay period doesn’t meet all award requirements.

• Annual salaries no longer provide protection – even if staff are paid well overall, every single pay cycle must meet Award requirements.

• Extra red tape and record-keeping will hit small employers hardest, while large corporates have payroll and HR teams to manage it.

That’s why COSBOA is calling for urgent legislative change to restore fairness and flexibility.

COSBOA is urging the Government to:

• Seek an urgent regulatory or legislative fix to restore flexibility in payroll and set-off clauses.

• Provide clear guidance to employers on how to comply in the meantime.

How you can help:

We are asking our member Associations to contact the Minister for Employment and Workplace Relations. To make it simple, we have prepared a template letter and background information.

Association Letter Template:

Download the Association Letter Template:

Association Template Letter - Representations to Minister for WR Set Off Decision .docx

Download DOCX • 17KB

Background Information:

Download the Information Sheet:

COSBOA - Payroll Burden Information Sheet - September 2025.pdf

Download PDF • 256KB

Instructions:

• Download the template letter.

• Insert your organisation details where marked.

• Send the letter via email or post to the Minister for Employment and Workplace Relations.

  • You can find the email address or use the form online here.

Optional: Copy your local MP so they are aware of your concerns.

Find your local MP's contact details here.

Read COSBOA’s full media release on this issue here.

Together, we can help reduce red tape and ensure workplace laws work for small business.

Help fix the payroll burden for small business!