A recent senate inquiry found that the country was grappling with a serious problem of unlawful non- and underpayment of employee remuneration by employers. The senate committee termed the situation as “systemic, sustained and shameful”.
During the recently held Jobs and Skills Summit, the federal government reaffirmed its commitment to several employment-related reforms including the criminalisation of wage theft. The Fair Work Ombudsman (FWO) is particularly focused on Australian universities that have been highlighted as being prolific in their underpayment of staff members.
A federal report from March 2022 identified causes for this problem including having large casual workforces, insecure work arrangements and funding cuts. It has resulted in several highly publicised scandals relating to underpayment at universities, with the National Tertiary Education Union also delving into investigations and taking action against perpetrators. The FWO has further announced its intention to focus on underpayments as part of its new compliance and enforcement policies in 2022-2023.
Jason Low of the Association for Payroll Specialists noted that about three-quarters of audits revealed incidents of over and underpayment. He added that some of the related errors were found to be costing employers millions and digitising payroll data would help organisations meet their Single Touch Payroll (STP) obligations. He said that employers were obligated to digitally report payroll data to the ATO, with STP Phase 2 now requiring even more payroll data that would be shared with other government departments including the FWO.
The increased visibility of payroll data is expected to help in more easily identifying likely payroll errors that would result in employers being audited. Low is advising companies to invest in relevant processes and technology that will ensure they process accurate payrolls every time.
The use of technology is likely to help companies keep up with ever-changing compliance requirements, with the automation of tax calculations expected to help ease complexity by allowing payroll teams to work faster, reduce risk and scale their work for greater efficiency.
The use of payroll software can help payroll teams to work more efficiently, leaving them more time to focus on other value-adding responsibilities. it can also empower employees to become more informed about their finances. When combined with financial literacy that makes them more aware of the remuneration and other entitlements they qualify for, employees can enjoy greater financial well-being. By investing in and adequately taking advantage of technology and processes to get payroll right, companies will be better able to keep up with the ever-changing work environment.
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