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‘Not sustainable’: FWO criticises businesses for under-resourcing payroll

A recent spike in businesses confessing to underpayments and compliance issues has highlighted how employers have “taken their eye off the ball”, says the Fair Work Ombudsman.

Tax&Compliance Jotham Lian 28 October 2019
— 1 minute read

Speaking at The Association for Payroll Specialists’ (TAPS) conference, Fair Work Ombudsman director of knowledge Cletus Brown said the agency has seen around 30 self-disclosures over the last “two to three years”.

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“Some of the larger businesses may have taken their eyes off the ball and not employ as many payroll specialists,” Mr Brown said.

“Quite often, we’ll deal with businesses and we’re staggered that only two or three people are looking after payroll for several thousand staff, and that’s not sustainable, really.”

Mr Brown’s comments come after the FWO revealed that it recovered more than $40 million in wages, penalty rates and superannuation for 17,718 workers across the country last year.

Honest mistakes

Mr Brown said the prevalence of social media has also caused directors and boards to ask questions of their business to ensure they are compliant before their possible indiscretions make the headlines.

“As a regulator, we can tell [when people are making honest mistakes]. When people come to us, you can understand the mistake they’ve made, why that has happened and that most people are trying to do the right thing to fix it and make sure that it doesn’t happen again,” Mr Brown said.

However, Mr Brown said the agency would turn its attention to businesses that were trying to cover up their underpayments.

“They’d had the lawyers in, the big four in and then buried all the bodies. They haven’t even left mounds in the lawn — it’s flat and smooth and there’s nothing to see here. As a regulator, that [piques] our interests and we want to know what happened there,” Mr Brown said.

“So often, some of the larger firms, they’ve taken their eye off the ball and haven’t resourced the area properly enough. And that’s why people under pressure forget to tick boxes, people under pressure will not understand the awards accurately.

“And importantly, because there’s not the resources invested, no one has gone back to audit them or check, and that’s where people can really get unstuck, because you can go for years looking at clause thinking you’re doing the right thing but it’s not right.

“You need someone with a fresh set of eyes to come in and say, ‘No, it is wrong’.”

‘Not sustainable’: FWO criticises businesses for under-resourcing payroll
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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