Some of Australia’s biggest companies have recently made headlines, not for their corporate success, but for wage discrepancies that have affected thousands of workers. From Woolworths to BHP, stories about underpayments have highlighted a systemic problem within some of the nation’s most established firms. Such significant underpayments reported in major companies should serve as a wake-up call for all employers to scrutinise their payroll processes before they see their name in the news for all the wrong reasons.
Payroll mistakes can have far-reaching consequences, both financially and in terms of employee trust and company reputation. Considering the complexity of Australia’s employment laws, it’s understandable that errors occur. However, statistics from the office of the Fair Work Ombudsman (FWO) paint an alarming picture. The FWO recovered $509 million for 251,475 underpaid workers in 2022-2023. And, according to PwC, Australians are reportedly underpaid by approximately $1.35 billion every year, with the construction, healthcare, accommodation, and food services sectors most affected. Unfortunately, many employees may not even realise they are being underpaid — highlighting the fact that these issues are often systematic, not isolated incidents.
So, why is this happening? One contributing factor is the complexity of Australia’s industrial relations system, which is quite easy to mismanage. According to the 2023 Australian Payroll Survey, only 17% of individuals responsible for payroll in Australian businesses are fully qualified. This figure is alarmingly low considering payroll is often a business’s largest expense.
However, it’s not only underpayments that are causing problems. Overpayments also occur and can cause significant distress for employees who may have already spent the money they are then asked to return. This ‘set and forget’ mentality leads to financial complications for both employees and businesses. It also puts strain on the relationship between employer and employee.
How to turn payroll into an asset
Workforces have become more complex with the rise of the gig economy and an increase in variable work patterns, trends that continue to grow. And, given the ongoing cost-of-living crisis, ensuring workers are fully compensated for their efforts is crucial.
There are five ways businesses can ensure their employees are paid correctly and on time, all the time:
- Invest in skilled payroll professionals: Engaging certified payroll experts to complement your internal team can ensure that complex payroll systems are navigated effectively. These professionals bring a depth of knowledge that is vital for maintaining compliance with current payroll laws and practices.
- Choose the right payroll software: Select payroll systems that are configurable and can handle a variety of employment scenarios. These should offer comprehensive functionality, including system administration, Single Touch Payroll (STP) and Payday filings, bank file submissions, and detailed reporting. Customisation and seamless integration with existing business systems are also essential for streamlined operations.
- Stay on top of payroll audits: Conducting regular payroll audits and reconciliations is critical for early detection of payment issues. This practice is key to upholding accurate and trustworthy payroll records.
- Keep the lines of communication open: Fostering transparent communication and providing training on self-service portals, reporting, and notifications will empower your team. Ensuring that employees have the tools to understand their payslips and the payroll process contributes to an environment where they can easily identify and raise concerns.
- Leverage automation for efficiency: Incorporating automated payroll solutions can lead to significant improvements in efficiency and accuracy. Automation reduces the risk of human error and can lower operating costs while also ensuring that the payroll process complies with relevant regulations and standards. It’s about finding technology that simplifies the existing workflow and aligns with the wider business strategy for growth and scalability.
How Affinity can help
Affinity is here to work alongside businesses to manage payroll complexities effectively. Our aim is to ensure that employee compensation is accurate and delivered with a sense of security and trust. With the traditional employment model evolving, our expertise is invaluable in keeping businesses compliant, and workers fairly paid.
At Affinity, we offer two payroll options. Our supported payroll solution boosts your existing payroll team with our expertise. You get extra help to manage and streamline payroll tasks, using the latest technology for better accuracy and efficiency. Our team steps in with services like system admin, compliance, interface customisation, and training, making sure your payroll runs smoothly.
And if you want to hand over your entire payroll operation, our fully managed payroll solution is the way to go. We take care of everything from start to finish — including processing payments, handling queries, and ensuring everything is compliant and up to date. Ours is a complete payroll solution that reduces risks and costs, and is managed by our experienced team.
By outsourcing to Affinity, your payroll becomes an asset, managed by professionals who make compliance seamless and provide dedicated support for all payroll-related queries. To find out more, contact the Affinity team today.
For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.
