ARE YOUR PEOPLE BEING PAID CORRECTLY?

Did you know that more than half of Australian companies have made a payroll error in the past 24 months, according to research from workforce management platform Rippling.

A significant underpayment issue has come to light within one of Australia’s largest private hospital operators, Healthscope, leading to an estimated $21.7 million in unpaid wages for staff. The underpayment of staff impacted approximately 200 current and 300 former employees.

Southern Cross Health Care (Tasmania) was subject to an underpayment issue that reportedly stemmed from errors in interpreting the award rates and classifications correctly. These discrepancies included miscalculations of overtime rates, penalty rates, and allowances. Reports have surfaced that this issue affected approximately 8,000 employees with the total value of the underpayments in the vicinity of $20 million, which underlines the gravity of the issue.

You may have also read about IAG - which operates brands including NRMA Insurance and CGU who underpaid workers between 2013 and 2023. The Fair Work Ombudsman (FWO) investigation found the underpayments were caused by "basic shortcomings" in time and attendance systems of Insurance Australia Group Services Pty Ltd and Insurance Manufacturers of Australia Pty Ltd, which employ more than 90% of IAG's workforce.

Domino’s, a major restaurant chain, Australian universities, Woolworths, Commonwealth Bank, the Reserve Bank of Australia, and a host of others have all been caught underpaying staff, paying dearly in terms of reputation and real cost.

Underpayments (better known as wage theft) are a serious matter, and from 1 January 2025 will be considered a criminal offence. Ignorance, however, is not a defence, warns Legal Practice Director Meg Crawford of Australian Industry Group (AIG). “In most cases, underpayments are not deliberate. They are frequently the result of payroll errors or inadvertent misapplication of awards or enterprise agreements”

Confusion over awards is not uncommon.

If you are unsure if you are paying your people correctly, the short answer, is you are probably not. If you are using a time and attendance solution which has an outdated award interpretation engine, you are at risk of non-compliance; and hefty penalties.

At Optko, we have partnered with both Rippling and WorkAxle. Both platforms are the latest technologies in ensuring compliance, so you avoid “wage theft”.

Don’t get caught, like IAG, Healthscope and many other organisations accidently underpaying their workers. Talk to us to today about how we can help transition you to modern and fully compliant workforce management platforms.

If you want to learn more about adopting a modern workforce management solution Schedule a call with us today.