The technology reads the 122 modern awards and audits data in enterprise IT systems controlling payroll, to ensure staff are receiving their proper entitlements. The software can also be used to model the impact of particular interpretations of awards.
PaidRight CEO Duncan Stone: “We blended legal informatics and data and reasoning capability, so instead of doing a sample test you can audit every employee and every entitlement.” Louise Kennerley
CSIRO’s Data 61 remains an investor in the company, which has been in market for three months, and joins former PwC chief executive Luke Sayers and Perennial Value Management on the register. PwC sold out to protect audit independence.
Given most large companies run multiple systems for recording employee time and attendance, conducting “enterprise resource planning”, and making payments to staff, PaidRight has built a data schema that connects the systems to target underpayments falling through the cracks.
As well as helping to fend off action from the Fair Work Ombudsman, the technology could be used by staff to negotiate enterprise agreements.
Many companies conduct sample testing to ensure they are paying staff the right amounts under various awards, but this may not meet obligations under industrial relations laws.
“It is not enough just to look at samples,” said PaidRight chief executive Duncan Stone, a former director at PwC. “We were like: ‘This is what technology is built for’, technology can provide the control solution. We blended legal informatics and added a data and reasoning capability so that instead of doing a sample test, you could test every employee against every entitlement.”
A challenge for the technology was dealing with awards that often do not have black-and-white interpretations and which evolve over time.
“It’s not like there is one interpretation of many of these awards; awards have flexibility in them,” Mr Stone said. “We have made the system flexible enough, so you can flex your interpretation to decide what the payment should be. Companies like to look at the impacts of different interpretations.”
Three of the major banks were among those swept into wage scandals this year. In October, National Australia Bank made a $128 million net increase in provisions for underpayments stretching back to October 2012. NAB did not disclose how many employees it had underpaid; its systems use nearly different 800 wage codes.
Data61 director Jon Whittle said PaidRight’s technology “is based on more than a decade of legal informatics and computational law research” within CSIRO’s Data61 and it “has the potential to free up finance, HR and other support service teams and enable them to focus on valuable, high-impact tasks”.
Small business ombudsman Kate Carnell said in July that small businesses should be considering technology to help them interpret and implement complex regulations. “This would be particularly useful in the industrial relations space where regtech solutions could ensure small businesses are paying wages and entitlements correctly and on time,” she told the Senate select committee on financial and regulatory technology.
That committee called on the government to explore options to promote the use of regtech solutions to help SMEs comply with obligations under industrial awards and recommended further work be done to allow regtech to be used in industrial relations while ensuring employees are protected.