Employers urged to 'simplify, streamline' payroll operations to prevent wage theft
Employees across Australia are losing nearly $850 million annually due to wage theft, as cases of payroll errors continue to plague workplaces, according to a report.
Research from Rippling revealed that 59% of organisations across Australia have made a payroll error in the past 24 months, 9News reported.
Employers with over 50 employees were more likely to make mistakes, according to the research. Among the common errors are:
- Under- or overpaying an employee (48%)
- Delayed payment (44%)
- Misgrading an employee (28%)
- Not making superannuation payments (24%)
Matt Loop, Rippling vice president, said they didn't expect the results to be that high.
"Those numbers are quite sobering," he told 9News.
Reforms around underpayments
Loop previously told HRD that underpaying employees can impact trust and morale, and eventually recruitment and retention of staff.
"Underpayments don't just erode employee trust by signalling an undervaluation of contributions, but it also leads to morale decline, dissatisfaction, and disengagement among staff," Loop said. "Individuals will often feel like their employer does not care about them - or their wellbeing - as much as it should."
To curb cases of wage theft, the Australian government recently introduced reforms seeking to criminalise intentional underpayments against employees.
Loop said these reforms are bringing a "new level of scrutiny for organisations."
"Organisations must therefore ensure their operations are in good shape to keep up with these changes," he said.
"Businesses should look to simplify and streamline their HR and payroll operations, where possible mitigating the chance of errors occurring. Additionally, providing training and support for managers and HR personnel on proper payroll procedures can help prevent future errors."
