Payroll Problems

Payroll Problems

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Lush, Super Retail Group and now, the ABC. Why is payroll so hard to get right?

In this article, CCER’s Colin Davy answers some of our commonly asked questions.

Last year we brought you the cautionary tale of soap giant Lush, which admitted payroll problems meant it had been short-changing employees.

Within weeks, the Super Retail Group which owns outfits such as Super Cheap Auto and BCF confirmed it too had been accidentally underpaying staff.  And now, the ABC, admits it’s been having trouble with its 1, 2, 3’s – leaving potentially thousands of employees out of pocket.

These are large, well established organisations with professional payroll departments yet they still made mistakes.  Why is it so hard to get it right? CCER’s Employment Relations Specialist, Colin Davy, says that’s because payroll matters are increasingly complex and regularly changing.

“Whether it’s penalty rates or agreements to offset them, changes to the minimum wage or modern awards, equal remuneration orders or new rules on when and how payments should be made – the laws affecting payroll are vast and varied.

“Organisations need to regularly review their wage or salary obligations as it’s easy to miss an update if you don’t. That’s when mistakes get made, and organisations like the ABC go from reporting on Lush’s payroll problems to reporting on its own.”

Colin says payroll issues are among CCER’s most commonly asked questions. So, we’ve put together five things to consider when paying staff.  They’ll help keep your organisation on track and out of the headlines.

Are you paying a higher wage to off-set penalties, allowances and loadings?

On commencement, employers often pay employees a higher wage to compensate for penalties, allowances and loadings (also referred to as a ‘set-off clause’). It’s important to review these arrangements regularly as increases in the minimum wage or changes to work patterns may mean the higher wage is no longer sufficient and the employee may end up unintentionally worse off.

Are you providing employees with their pay slip on time?

After pay day, employers only have one working day to provide employees with their pay slips. This is another deadline that’s easy to miss during a busy week! Ensuring staff receive their pay slips on time gives them to chance to point out concerns before they become a problem.

Do your payslips contain all the necessary information?

There are specific requirements about what information must be in pay slips. This includes the rate of pay, gross and net amounts paid and details of any deductions, loadings, penalty rates, allowances or entitlements. For casual or irregular part-time employees this also includes the hours worked.

Do you pay particular attention to pay during leave?

It can be tricky figuring out the correct rate of pay when time-off intersects with other entitlements.  For example, an employee on holiday can have annual leave re-credited if they get sick, however they can’t if on long service leave.

Do you keep good records?

This is key!  Be mindful of your obligation to keep general, pay, hours of work, superannuation and leave records for all employees for at least seven years. Not only is this required by law, but it will help you respond to employees if they have questions about their entitlements.

Payroll can be complicated, and we encourage you to contact us if you’ve any questions or concerns. Our Employment Relations Specialists can answer all of your questions ensuring all advice is tailored to your specific situation. Don’t hesitate to get in touch online or give us a call on 9390 5255.

 

 Colin Davy is an Employment Relations Specialist at CCER

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