A staggering $473 million in underpayments has been exposed, leaving thousands of workers short-changed. This revelation raises serious questions about the intent of employers: is this a calculated scheme to exploit workers or a result of widespread confusion surrounding complex award systems? As investigations unfold, the true extent of the problem and the motives behind it will be laid bare.
According to Fred van der Tang, CEO of payroll compliance technology company, PaidRight: “Small businesses in Australia often struggle with accidentally underpaying their workers due to the complexity of the country’s awards system. The system sets out minimum pay rates and conditions based on industries and job roles, but the detailed, varied, and constantly changing nature of awards can make compliance difficult. Small business owners, especially those without dedicated HR or payroll staff, may find it challenging to keep track of the specific provisions for different employees, such as base wages, penalties, overtime, and allowances.
“Moreover, the system’s complexity is compounded by the fact that a single business might have employees covered by multiple awards, each with different entitlements. Misinterpreting or overlooking conditions like shift loadings, weekend rates, or specific entitlements for casual workers can lead to underpayment. The lack of clear, accessible resources tailored to small businesses also adds to the challenge.
“Consequences of non-compliance, even if accidental, can be severe, including financial penalties, reputational damage, and legal action. Small businesses, which may already operate on tight margins, are particularly vulnerable. Navigating award compliance requires time, attention, and often external expertise, which many small businesses find hard to afford or access, leading to unintentional errors in worker payments.”
