Payroll expert warns Australian companies at serious risk

by Stephanie Zillman19 Mar 2013

According to the head of the peak payroll body, an alarming number of Australian companies are non-compliant and not meeting statutory requirements, putting employers at risk. This is compounded by companies using inefficient payroll practices, and having unqualified staff to manage what is a very complex process.

Australian Payroll Association (APA) managing director Tracy Angwin, sounded a warning to company directors, chief financial officers and HR managers over the urgent need for all businesses to come up to speed on their payroll obligations or risk serious consequences, including substantial penalties and brand damage. “The fact is that most businesses are not taking their payroll obligations as seriously as they should be, and are failing to leverage payroll as an asset of the organisation,” Angwin commented. “We can see that through payroll disasters, such as the rollout of Queensland Health’s flawed payroll system, which could ultimately cost taxpayers up to $1.2 billion, and the $20 million payroll fraud at retailer Clive Peeters.”

Angwin said that changes to the Fair Work Act at the end of 2012 meant that businesses needed to be fully compliant on their payroll systems or they risked substantial fines from the Fair Work Ombudsman.

“There is simply no margin for error, but unfortunately a large number of the people employed in payroll do not have proper payroll qualifications. They have usually fallen into a payroll career; but this is exposing their organisations to serious risk,” Angwin added.

A perusal of recent Fair Work Ombudsman (FWO) investigations reveals a startlingly high number of payroll incidents. In March alone FWO reported:

  • Workers in the Hunter region have been back-paid a total of $41,400 following recent intervention by FWO
  • A Gold Coast worker had been underpaid for almost 15 years, and was back-paid $34,600 after an investigation
  • A former Canberra restaurant operator has been fined $16,170 after using individual contracts to try to avoid paying award wages and entitlements to staff, resulting in underpayments of more than $50,000.
  • A Melbourne truck was driver allegedly underpaid $124,000 – FWO launched a prosecution against a Melbourne grocery importation business, alleging it underpaid a delivery truck driver who speaks limited English more than $124,000 over a five-year period.
  • Twelve trolley collectors in Sydney were not paid any wages over an 11-day period, it is alleged in a new prosecution case now before the Federal Magistrates Court.
  • A national advertising company is facing court over alleged $59,000 underpayment of employees – FWO says it underpaid 45 young and foreign workers, almost $60,000.
  • A prosecution against a Northern NSW security company has been launched with FWO alleging it underpaid seven security guards a total of more than $62,000.
  • The former operators of a Melbourne martial arts and fitness centre have been fined a total of $45,936 for paying young trainees as little as 73 cents an hour.


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