B2B Payments

Payroll Automation Blamed In Aussie Underpayment Scandals

A string of underpayment cases that have emerged across Australia in recent months is raising concerns over corporates’ reliance on automated payroll and accounting platforms, the Sydney Morning Herald reported Thursday (Dec. 26).

Pointing to a recent case at hardware chain Bunnings, which last month admitted to $4.24 million in underpayments to 40,000 current and former employees, the publication said possible over-reliance on payroll technology is increasing the risk of underpaying employees.

“When you read the fine print, payroll solutions are really good at dispersing money,” said Ben Renshaw, partner in charge of people advisory, employment and expatriate taxation at advisory firm BDO, in an interview with the publication. “They’re quite good at doing the tax calculations. What they’re entirely useless at is knowing what to pay people.”

According to reports, analysts are warning that corporates could be relying too much on automated payroll technologies that use outdated or incorrect data fed into systems by untrained employees.

“What I’ve seen is a high level of trust in payroll solutions that thinks they will fix the problems,” added Renshaw. “I think this has been aided and abetted by payroll providers, because that sounds really good.”

He warned that Australian businesses investing in these platforms are failing to also use experts trained to ensure that data inputs are accurate to guarantee correct compensation is paid.

Australia recently launched a wage theft inquiry after a spat of allegations of wage theft and underpayment this year. The chairman of the inquiry, Labor senator Alex Gallacher, told lawmakers last month that the government “won’t be shy” in probing corporates accused of underpaying staff.

In November, Woolworths said it had underpaid about 6,000 employees by as much as $208 million, while celebrity chef George Calombaris also issued a public apology in July after acknowledging that his company underpaid staff by about $5.56 million.

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