Chances are, public sector agencies around the country will find themselves caught up in some form of underpayment episode, writes Christina Waddy.
Incidences of employee underpayment have provided excellent fodder for headline writers in this country in recent years. It’s a rare month that doesn’t bring news of another wage theft scandal, starring a large and well-resourced organisation that arguably should have known and done better.
In recent years, several Australian retailers have experienced uncomfortable periods in the spotlight; their industrial relations arrangements and systemic shortcomings investigated and penalised.
The bad news for scores of public sector organisations around the country is that they may find themselves caught up in some form of underpayment episode and it’s a very real risk.
Unpacking the risk of outdated solutions
In many instances, it’s because they’re using outdated systems and solutions that lack the capacity to manage the complex employment arrangements and wage scales that come standard in public sector departments and agencies.
Paper print-outs, spreadsheets and other disparate systems continue to be used in many back offices and the manual checking of rostering data and hours worked remains commonplace in some settings.
It’s an inefficient way to operate and carries a significant risk of human error. If mistakes aren’t detected and rectified quickly, that risk can compound over time, giving rise to the sort of multi-million discrepancies with which some of Australia’s higher education institutions are now having to contend.
Heading off high-stakes mistakes
Since 1 January 2025, the stakes have risen, for organisations and leaders deemed to be responsible for large scale incidences of wage theft. The intentional underpayment of wages by employers is now a criminal offence and businesses that are found to have deliberately underpaid their staff can be handed heavy fines – the greater of three times the amount of the underpayment and $8.25 million.
Guilty individuals, meanwhile, face up to 10 years in prison, the greater of three times the value of the underpayment and $1.65 million, or both. Importantly, we note that the criminalisation for intentional wage underpayments does not include honest mistakes.
These recent changes in law demonstrate a greater focus on paying employees correctly to address widespread concerns of underpayment to vulnerable workers. There’s an additional onus on public sector agencies to lead by example, which they can do so by having a framework that helps support compliance obligations.
Tools to make the task easy
Fortunately, underpayment dramas aren’t an inevitability for government agencies and bodies. Solutions exist that can help them meet their obligations and stay on the right side of the law.
Employers should invest in robust payroll foundations that help promote employment conditions are adhered to, smooth processes regarding entitlement accrual and wages and salaries are efficiently managed for employee on their books.
Technology that can be deployed to help strengthen compliance by reducing errors, improving data security, and providing a single source of truth for all people and payroll-related matters.
Work with a partner whose all-in-one human capital management and payroll platform is updated continually to reflect the latest changes to Australian employment awards, and which can be customised to accommodate the public sector pay scales applicable to your organisation, and you’ll know you’ll have help in getting it right.
Putting the public sector on stronger footing
Compliance with industrial relations legislation should be a given for public sector agencies and organisations, at all levels of government.
Investing in a latest generation payroll and HCM platform makes it easy to achieve. Not only does it enable HR and payroll teams to support calculations, maintain accurate records, and implement changes at speed, it frees the team up to focus on higher-value work. Ultimately, if you want to help support your payroll and HR teams to pay your people properly every single fortnight, it’s foundation technology that belongs at the heart of your ICT stack.
Christina Waddy, division vice president, large enterprise and public sector, Dayforce
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