Organisations have faced ongoing challenges with wage non-compliance as high profile reports of underpayment continue.
Historically, wage non-compliance did not receive the same degree of public focus compared to other compliance areas, such as tax. But this is rapidly changing with wage compliance at the forefront of regulators, legislators, unions and boards.
The issue has been brought further into the spotlight with new state-based criminal offences. COVID-19 has prompted a closer examination of Australia’s workplace relations framework, including the formation of a working group of unions, employer representatives and experts to explore solutions around wage compliance and enforcement.
The consequences of getting it wrong can be high, resulting in damage to reputation and brand, large penalties, contrition payments and liability for back payment. Strong sanctions should apply to those who deliberately underpay however in many cases, the root causes of underpayment arise from errors which result in both underpayments and overpayments. Many organisations are deciding not to recover these overpayments, instead focusing on remediating underpayments and their root cause.
Wage non-compliance impacts industries and organisations of all sizes and while system complexity gives rise to risk, it is no longer an acceptable reason for underpayment of wages.
In this report we look at: