Payroll Errors - Are your Employee Systems up to the task?
The Fair Work Ombudsman (FWO) is recently focused on businesses underpaying staff.
Whether this be accidental or otherwise, it is essential that employers update their payroll systems to ensure they don’t risk fines and back pay penalties.
A number of businesses have been in the news spotlight recently for failing to pay staff what they were owed.
In response, several states have updated their laws to officially recognise wage theft, targeting employers who deliberately withhold wages and other worker entitlements.
In November 2020, healthcare giant Australian Unity, which offers disability and aged care services, acknowledged to the FWO that it had some 8,900 employees who were underpaid over a 7 year period, totalling more than $7.3M.
The errors apparently resulted from incorrectly paid entitlements, including wages, shift loading and superannuation.
Whilst this was understood to be a genuine error, there are instances of wage theft which are deliberate attempts to steal from employees.
So, it’s easy for honest businesses to fall foul of the law because calculating payroll and leave entitlements can quickly become complicated.
In another instance Aged and veteran services organisation RSL LifeCare was required to back pay staff in NSW and the ACT more than $5 million, because the not-for-profit organisation, underpaid employees due to fundamental payroll and rostering system setup errors, including failing to pay overtime rates and weekend penalty rates.
RSL LifeCare only avoided significant fines because it came forward on realising the error and cooperated with the FWO for speedy rectification.
These examples are a timely reminder that every business must diligently check its payroll systems and processes and adopt a modern payroll system that automates and streamlines processes and tasks thus reducing errors and improving compliance.
Frequent rule and rate changes can make the process difficult and time consuming especially if you manually pay your employees each pay run.
By using strong cloud payroll software you can improve efficiency via automation as well as syncing with the ATO and superannuation providers.
Processing payroll has become increasingly complex and the penalties for getting it wrong are harsher than ever, so there’s never been a better time for businesses to revisit their payroll system to ensure it all adds up.
Need Cordner Advisory to help?
If you believe that your payroll and super systems may need an overhaul, please do not hesitate to contact one of our team on (07) 5504 5700 to discuss a review of your processes.
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Cordner Advisory in Broadbeach, Gold Coast, is your go-to solution for tackling payroll errors and enhancing superannuation systems. Get in touch with us here for expert assistance.