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E ven organisations with advanced payroll systems are not immune. The question every employer must ask themselves is “Could this be happening in my business right now?” When Small Errors Become Massive Risks Payroll errors aren’t always malicious, but regulators care about the outcomes, not just intent. A miscalculation repeated across a workforce for months or years can trigger civil and criminal penalties, and in some cases, board-level scrutiny. Consider a hospitality client we support. Their 17 – 19 year old staff regularly delivered alcohol to tables during weekend and dinner shifts. Payroll, however, applied standard junior rates based solely on age.
Under clause 13.5 of the Restaurant Industry Award 2020, junior employees performing liquor service duties must be paid the full adult rate for the classification of work being performed, even if they are under 18. Over several years, this small oversight resulted in tens of thousands of dollars in underpayments. Remediation involved: Backpay issued to all impacted staff Payroll system updated to flag liquor service duties Rostering and award interpretation training rolled out across all teams Beyond the financial cost, this case illustrates a key compliance lesson: even small errors can expose a business to risks under the modern award for minimum rates, penalty rates, and overtime. Regulators focus on actual outcomes for employees, not just employer intent. Salaries Can Mask Significant Underpayments Salaries and flat hourly rates are convenient, they simplify payroll and make budgeting
Even Australia’s largest employers have learned the hard way. Without robust oversight, what seems like convenience can quickly become a costly compliance disaster.
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GLOBAL PAYROLL MAGAZINE ISSUE 20
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