Payroll teams on high alert in wake of underpayments

payment, payments, pay rules, payroll managers

About 36 per cent of payroll managers have been found to have taken action on the wake of alarming underpayments being committed recently by a number of businesses through changes in their payroll, human resources, and finance departments.

The survey of more than 1100 payroll managers by the Australian Payroll Association also revealed that 38 per cent of the payroll managers’ respective organisations have made some changes to their compliance processes or systems with regards to employee pay and entitlements. A further 17 per cent said their organisation had committed to making changes in 2020. However, 46 per cent of payroll managers’ organisations have yet to make any changes or commit to make changes for this year.

Combatting underpyament errors

As to the measures being made by some organisations to avoid an underpayment scandal, the survey revealed that one in five payroll managers (20 per cent) observed that senior management is checking reports and other documents from the payroll office. And almost one in five (17 per cent) said that their organisation has instructed employees to report any discrepancies in their payslips and entitlements immediately. Over one in 10 (13 per cent) of organisations implementing changes have organised further training for payroll staff, while 10 per cent have outsourced to external payroll or HR experts.

In addition, respondents are particularly focused on certain changes in employee pay and entitlements this year, such as the “bundy clock” legislative changes to annualised salaries that came in place from 1 March this year for 15 per cent of payroll managers. 11 per cent will focus on payroll or award interpreting technology, and just eight per cent will focus on overtime.

More focus on training needed

“Again, it seems that payroll team training is being overlooked as an area of focus to combat employee underpayments – only six per cent of payroll departments reveal they will focus on training this year,” Australian Payroll Association CEO, Tracy Angwin, said .

“The errors behind the scandals are often a result of inadequate training given to payroll managers. The Australian Payroll Association’s 2019 Benchmarking Report reveals that the average payroll manager has just 2.6 days of training a year. Yet they are responsible for millions of dollars in payments and ensuring those payments meet the law,” Angwin said. “With employee payment legislation constantly changing, it is crucial for payroll managers to have the relevant qualifications and to keep updating their knowledge by attending training sessions regularly.”