Payroll Scandals – Underpaid Staff and how to ensure you are compliant

In recent times, there have been a bunch of successful Australian companies involved in payroll scandals. From tiny convenience stores, to massive supermarket chains, Australians are finding themselves being underpaid and it is recently coming to light.

Whether it be unpaid wages, overtime, penalty rates, commissions or superannuation, businesses have been making some massive payroll mistakes. While legislation can sometimes get hard to keep up with, as an employer it is your responsibility to ensure you are adhering to any requirements and looking after your employees.

The Impact of a Payroll Scandal

While a complex legislation and payroll system is often quoted by the larger companies as a reason for underpaying staff, more developments will almost indefinitely result in a wave of more complex legislation and potentially criminalising the practice.

Yes, mistakes get made – but a small payroll error could result in the collapse of a business, such as George Calombaris’ restaurant empire. While other brands seem to go unharmed (for now), the same is less likely true for small businesses. The reputation to your brand if you are underpaying staff can be the end of your business. The hospitality industry is one of the worst, mainly full-time staff doing excessive unpaid overtime. Leaving staff unhappy and more likely to leave, go to fair work or tell others about their experience with your business.

Get it right from the start

Onboarding is your first step to success in avoiding underpaid staff and an unwanted payroll scandal. Getting the set up correct in your system is the first vital step to ensuring you avoid any wage scandals. Setting up your employees in whatever systems you are using can help ensure you are also setting them up with the correct pay rates, super contributions and other factors. Having an excellent onboarding process will save you from a whole plethora of issues.

Regular Review

If you are concerned your payroll system may result in a payroll scandal then we recommend undergoing regular reviews to ensure there are no legislation changes that impact payroll. Ensure all employees are properly updated if they undergo a change in their employment type. Work closely with the service provider if you ever have any issues and you should be fine.

Keep up with legislation!

We can’t stress this enough. It is your responsibility as an employer to pay your staff correctly for the work they are doing. Pay rates, minimum wage etc. are often reviewed and changing. While it may be frustrating – we understand – it is something that just cannot be avoided.

How to fix an underpayment

“If an employee has been underpaid, it needs to be fixed as soon as possible.” If you have been alerted of an issue with your payroll, resulting in the underpayment of your staff, we highly encourage you amend as soon as possible and ensure you keep up to date with any future wage increases or changes to legislation. For more information we recommend reading the Fairwork information online.