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1 in 3 payroll departments are on high alert in wake of employee underpayment epidemic

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More than 1 in 3 payroll managers (36 per cent) have admitted that the recent employee underpayment scandals – with the subsequent fines, warnings and legal action by Fair Work – have led to changes in the culture of their payroll, human resources and finance departments.

 

The finding was taken from a survey of more than 1100 payroll managers by the Australian Payroll Association, Australia’s leading network in payroll training, consulting and advisory for employers.

 

The survey revealed that 38 per cent of payroll managers say their organisation has changed some compliance processes or systems in relation to its own obligations to employee pay and entitlements. A further 17 per cent said their organisation had committed to making changes in 2020. However, an alarming 46 per cent of payroll managers say their organisation has not made any changes, or committed to making changes, in 2020.

 

Revealing what organisations are doing differently to avoid an underpayment scandal, one in five payroll managers (20 per cent) observed that senior management is checking reports and other documents from the payroll office. Seventeen (17) per cent also stated that their organisation has instructed employees to report any discrepancies in their payslips and entitlements immediately. Only 13 per cent of organisations implementing changes have organised further training for payroll staff, while 10 per cent have outsourced to external payroll or HR experts.

 

The Australian Payroll Association also asked respondents which areas of employee pay and entitlements they are particularly focussed on this year. Surprisingly, the ‘bundy clock’ legislative changes to annualised salaries that came in place from 1 March this year is a focus for just 15 per cent of payroll managers. Eleven (11) per cent will focus on payroll or award interpreting technology, and just eight per cent will focus on overtime.

 

Australian Payroll Association CEO Tracy Angwin says: “Again, it seems that payroll team training is being overlooked as an area of focus to combat employee underpayments – only 6 per cent of payroll departments reveal they will focus on training this year. The errors behind the scandals are often a result of inadequate training given to payroll managers. The Australian Payroll Association’s 2019 Benchmarking Report reveals that the average payroll manager has just 2.6 days of training a year. Yet they are responsible for millions of dollars in payments and ensuring those payments meet the law. With employee payment legislation constantly changing, it is crucial for payroll managers to have the relevant qualifications and to keep updating their knowledge by attending training sessions regularly.”

 

Q. In which areas are your payroll department and senior management particularly focused on after the wage scandals?

% of respondents

Annualised salaries 

15%

Award interpreting technology

11%

Overtime

8%

Superannuation

8%

Payroll team training

6%

Payroll technology

6%

Annual leave

2%

Meal breaks

1%

Personal/Carers leave

1%

 

About Australian Payroll Association

Australian Payroll Association is Australia’s leading network in payroll training, consulting and advisory for employers. It offers end-to-end payroll process reviews, compliance auditing, specialist recruitment services, payroll qualifications and training courses, and a membership program. Established in 2010, Australian Payroll Association offers the only nationally accredited payroll qualifications at Certificate IV and Diploma level through its registered training organisation, Australian Payroll Institute. It also holds annual events including its national conference and end of year seminars, in addition to releasing an annual Payroll Benchmarking Report. It also has a regular digital podcast series called ‘Talking Payroll’. For more information, visit austpayroll.com.au.

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