In the midst of rising inflation and increasing cost of living expenses, 64 per cent of workers are not only still experiencing underpayment issues but the underpayment figures overall have reached a record high.
According to new data from global payroll and HR provider ADP, this was a significant increase from the 50 per cent recorded just a year earlier.
ADP’s annual People at Work 2022: A Global Workforce View report also found that 11 per cent of workers say that they are “always” underpaid by their employers and 57 per cent have experienced other underlying issues with their pay such as failed payments or incorrect tax codes.
The report also noted that Australia’s growing underpayment issues are worsened by a lack of action from employers to correct payments quickly, with 61 per cent saying their employer has failed to resolve their underpayment issue within the next pay cycle.
“At a time when inflation and the cost of living is at an all-time high, more and more Aussie workers are finding it difficult to pay their rent, bills, and basic necessities,” Irina Shainsky, Legal Director ANZ at ADP, said. “It is more important than ever that employees are closely reviewing their pay and having conversations with their employers if issues arise. Employers have a responsibility to ensure they have the right systems in place to address payment issues.
“Incorrect and late payments have the potential to create cashflow and staff retention issues for employers,” Shainsky added. “These can also have knock-on effects on a business’s reputation. Higher inflation impacts consumers and businesses alike.
“Organisations are struggling with higher inflation and increased costs across the board,” she continued. “As a global recession looms, their commercial success will depend on their ability to track and review business expenses as early, efficiently and accurately as possible. With States starting to legislate against wage theft, the focus has increasingly shifted to businesses’ legal obligations when it comes to correct payments. Employers must be aware of all relevant legislation to ensure they are compliant.”
To help manage the complexity of pay, the report noted that businesses are increasingly turning to integrated technology solutions to essentially ‘outsource’ payroll services. Such technologies are seen to be helping businesses pay their employees accurately and on time, while also having access to a secure portal to easily manage reporting and compliance.
“Employee underpayments have wide-ranging implications on the Australian workforce and businesses alike, especially in the current financial climate. It’s imperative that companies source the expertise and tools required to address this issue to ensure their longevity as cash flow and employee retention continue to increase in importance for businesses,” Shainsky concluded.
