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Over 50 per cent of employees have been underpaid or paid late by their employer since COVID-19 hit Australian shores, according to a new survey.
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Underpayments impacting 1 in 2 Aussie workers
25 October 2021
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11 minute read
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According to ADP’s People at Work 2021: A Global Workforce View, one in two workers – 52 per cent – believe they have been underpaid at least once since the pandemic was declared.
A similar percentage indicated a belief that they had been paid late at least once over the same period of time.
Surveying 1,902 workers for the research, ADP pointed out that it’s not only an underpayment or delay issue, with a further 38 per cent of workers expressing that they had been overpaid.
Other issues with pay plagued 43 per cent of those surveyed – with failed payments or incorrect tax flagged as some of the reasons as to why.
Kylie Baullo, ADP’s Asia-Pacific vice-president – client services, said the prevalence of pay errors is alarming.
Arguing that it holds deep ramifications for both employee wellbeing and the business’ bottom line, she highlighted incorrect and late payments as having “a real, negative flow-on effect for individuals” – from loss of employee confidence, to stress and inability to pay bills.
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“For businesses, the headlines have shown there are significant financial and reputational implications for being charged with underpaying employees,” the vice-president also flagged.
Ms Baullo acknowledges that while COVID-19 introduced a need for greater flexibility, and saw an influx of legislative changes that impacted wages, tax obligations and entitlements, “not all businesses were ready to smoothly navigate the many changes to compliance and compensation”.
The survey also found that many workers are now paying closer attention to their payslips, perhaps due to the increasing unreliability surrounding payments.
ADP reported that around a third of Australian workers are now reviewing their payslips more closely than they ever did prior to the pandemic.
This heightened concern in itself should be a warning sign for businesses, Ms Baullo stated.
“An incorrect payslip on payday can have far-reaching personal implications and can feel like a real breach of trust for employees, and something they don’t forget in a hurry,” she said.
She has warned that employers must prioritise “running efficient, accurate and reliable payroll divisions” or they risk losing talent.
“When employees experience errors in their pay, payroll staff shift their focus to answering queries and checking historical data, distracting them from processing payments or spending time on more strategic work,” she said.
The first step to improving payroll accuracy is automating the input of data using integrated digital technologies, Ms Baullo advised.
The report found Asia Pacific (APAC) was the worst-performing region worldwide when it came to delayed payments, with 76 per cent of workers indicating they had been paid late. This compared to a global average of 69 per cent.
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