04:05 APAC
across HR, Finance and IT, with unclear ownership of compliance risk. Systems are relied upon to “handle compliance”, despite the unavoidable gap between legal intent and what can (and cannot) realistically be implemented in systems. Second, legal obligations are poorly translated into auditable system pay rules. Assumptions are made. Legacy practices are never challenged. Interpretations go undocumented. System pay rules are rarely independently validated. Errors compound quietly over time. Third, data foundations are often fragile. When historical payroll, time or rostering data cannot be reliably reconstructed, remediation scope expands. Regulators increasingly expect employee-favourable assumptions where uncertainty exists, materially increasing outcomes. Finally, payroll risk spikes during change. System implementations, restructures, acquisitions, and changes to employment conditions frequently proceed without sufficient payroll impact assessment. Awards are varied, enterprise agreements are renegotiated, businesses are acquired, and payroll is expected to absorb these changes without additional resources or validation time.
Tesco underpaid almost 78,000 workers by more than £5 million. In the United States, Disney agreed to pay $233 million to settle claims it underpaid nearly 50,000 Disneyland workers, marking California’s largest wage theft settlement. The U.S. Department of Labor’s Wage and Hour Division recently announced it has recovered more than $259 million in back wages for nearly 177,000 employees nationwide – an average of $1,465 per worker – in fiscal year 2025. Why Payroll Underpayments Persist Across almost every major Australian underpayment case examined by regulators, a consistent pattern emerges. Payroll underpayments are rarely caused by a single mistake. They arise from accumulated complexity and recurring weaknesses in payroll governance. Several contributing factors are common. First, payroll is often treated as an operational process rather than a regulated environment. Responsibility is fragmented
14 I 04:05
GLOBAL PAYROLL MAGAZINE ISSUE 20
Made with FlippingBook - Share PDF online