Alongside financial impact sits a less visible but equally enduring people cost. Underpayments often surface through employee complaints, grievances, disengagement and attrition. Trust, once damaged, can take years to rebuild. Importantly, these outcomes rarely stem from individual or team failure. They reflect governance gaps that have not kept pace with increasing business complexity, more systems, more industrial instruments, more changes and higher expectations of compliance. Underpayments: The Visible Liability Underpayments remain the most visible and emotionally charged consequence of weak payroll governance. When errors are confirmed, employers are required to repay unpaid wages, penalties, allowances, superannuation, interest and associated payroll tax. These payments are non- discretionary. Once liability crystallises, there is little room for negotiation. What varies is scale. In Australia, large supermarket chains have disclosed potential remediation liabilities ranging
At the other end of the spectrum, small and medium- sized employers have faced penalties and compliance orders that threaten business viability.
from hundreds of millions to more than a billion dollars. Major banks have back-paid tens of millions to tens of thousands of employees. Universities have collectively repaid hundreds of millions across casual and professional workforces. At the other end of the spectrum, small and medium-sized employers have faced penalties and compliance orders that threaten business viability. In one case, an underpayment of approximately AUD 1,400 to a single employee triggered mandatory system replacement, independent audits, ongoing regulatory reporting and compulsory training. This is a material financial and operational burden on a business with 35 employees. Across different industries, systems and workforce models, the outcome is consistently severe. This is not unique to Australia. In the UK, the government’s 2020 naming and shaming list revealed that
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ISSUE 20 GLOBAL PAYROLL MAGAZINE
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