PRESS RELEASE: Wage underpayment problem – pilot technology program could help Fair Work Ombudsman combat this issue

MARCH 16, 2020 – Employer and regulatory under-investment in available technology that automates correct pay conditions is leading to staff underpayment, a senior employment lawyer has submitted to the Senate inquiry into unlawful underpayment.
Andrew Stirling is a former employment lawyer at top-tier law firm Allens who now heads Tanda PaySure, the wage compliance division of Tanda, an Australian-based global workforce management business. Mr Stirling has made six recommendations in a written submission to the Senate inquiry.
His two key recommendations were for the Federal Government to fund the Fair Work Ombudsman’s (FWO) investment in payroll calculation technology, and for the FWO website to pilot an accurate pay calculator that empowers employees to identify if they are being underpaid.
INVESTMENT IN TECHNOLOGY – NOT MORE INSPECTORS – NEEDED
Mr Stirling said politicians and regulators need to take their share of responsibility on the underpayment issue to assist employers who are trying to navigate a complicated industrial relations system but are struggling with the complexity of compliance.
“Many employers are not investing in payroll calculation technology and still use outdated manual processes or are using cheap foreign technology not adapted to comply with Australian workplace law.
“Practical and legislative support from the Government would encourage uptake of technology that does comply, which would in turn reduce underpayments.
“Employing more Fair Work inspectors isn’t the answer. This may lead to a few more prosecutions each year. If we really want widespread, improved compliance outcomes there has to be a fundamental technological rethink,” Mr Stirling said.
He called for funding for FWO to invest in payroll calculation technology. The FWO would use the technology for its own compliance activities and would also make it available to employees and employers so that they could work together to achieve better compliance.
“Sophisticated payroll calculating technology is available on the market to manage award complexity. If the Government encouraged the uptake of this technology by the FWO and by employers it would lead to better compliance and fewer instances of underpayment.”
CALL FOR PAYROLL CALCULATOR PILOT ON FAIR WORK WEBSITE
Mr Stirling recommended that the Fair Work Ombudsman pilot the use of a true payroll calculator on its website, so users get an accurate picture of gross wages payable under an award.
“Last year FWO had more than 6 million calculations performed on its website “Pay Calculator”, which is the only publicly available way for employees to check their wages,” he said.
“The difficulty is the FWO’s “Pay Calculator” does not calculate pay at all, so employees can’t properly check their wages. It simply provides rates of pay based on award classification and age.”
At best, the information in the FWO’s “Pay Calculator” might help an employee to identify that they are being paid the incorrect hourly rate. Armed with the correct hourly pay, the employee would still need to manually calculate their pay based on rules in the modern award to determine if they had been underpaid and to what extent.
“A pilot program using accurate payroll calculation technology on the Fair Work website would allow employees to better monitor their pay. They could actually check if they personally have been underpaid, rather than just see a generic hourly rate.”
Mr Stirling said without such a program, many employers don’t know what to pay, and employees don’t know what they should be paid.
“If the FWO was funded to pilot the use of a true payroll calculator on its website, the user would be getting an accurate picture of the gross wages payable under an award,” he said.
“Such a payroll calculator would allow employees to identify and uncover underpayments in real time.
“It would also allow employers who do not have a compliant payroll calculator to check their employees’ gross wages. This would cut through any award complexity and allow employers who want to be compliant to uncover any underpayments before they arise. Complexity would no longer be an excuse for underpayment.”
Mr Stirling said his proposed pilot would allow the FWO to validate demand for a proper payroll calculator on its website, as well as determine the best way to meet that demand.
“A true payroll calculator, available to both employers and employees, is far more likely to lead to widespread compliance than simply giving the FWO more funding to undertake more of the same regulatory activities. More of the same is not enough. Australia needs to completely rethink how compliance can be achieved and monitored at scale,” he said.
“Tanda’s mission is to ensure employees are paid fairly and lawfully every time they go to work. This is to protect both employees AND employers.
“We’ve invested significantly in our award interpreting payroll calculator, used by more than 6000 organisations globally. It was purpose-built to comply with the Australian award system complexities.”
Mr Stirling said when it came to the small business sector, SMEs need off-the-shelf technological payroll compliance solutions.
“They do not have the resources to invest in expensive legal and accounting services to help them interpret and apply awards. Instead, they need to have confidence that when they invest in a technological solution it provides them with compliance off-the-shelf. This technology is essential to avoiding, as well as identifying and uncovering, underpayments.”
ABOUT TANDA
Tanda is a world-leading solution for workforce management, profitability and compliance. Founded in Australia in 2012, Tanda is now a global organisation assisting more than 6200 businesses and their 300,000+ employees with rostering, attendance, labour insights and workforce success.
Tanda’s workforce management platform eliminates paperwork and liberates employees and managers with products such as the Intelligent Rostering System, best in market Automatic Award Calculator, Attendance-to-payroll integration, Selfie Time Clock and its innovative Tanda Paysure compliance system. Business enquiries 1300 859 117. www.tanda.co
Media contact: Kathryn Britt, Cicero Communications [email protected] 0414 661 616