Why employee underpayment stories aren't all the same

Stories of underpayments are constantly in the headlines, highlighting that many large, well-resourced companies are not nailing their pay processes and as a result are being publicly criticised for failing to pay their employees correctly. 

Over the last six weeks there have been a number of different underpayment stories in the news. When only reading the headline of company name and sum of underpayment the stories appear very similar, but are quite different from one another when looking at the finer details of what errors actually caused the underpayments. 

‍

‍

Summaries of the Stories 

Australia Post 

‍

Australia Post has reportedly underpaid 19,500 employees around $1.8 million in annual leave due to a payroll error. The underpayments were found as a result of an audit conducted between 2013 to 2019. It was reported that there was an average of $92.00 underpaid per employee. 

‍

RMIT University and Monash University 

‍

RMIT University has reportedly underpaid casual staff an estimated $15 million. Since 2014, several casual staff have been paid at the “standard marking rate”, which is $10 to $20 an hour less than the “academic judgement” rate required by the employees’ enterprise agreements.  The agreement states casual staff must be paid 25% loading on top of the permanent and fixed contract pay rates “where the exercise of academic judgement is required” in marking assessments. 

It has been reported that Monash University has also underpaid staff close to $9 million over a 6 and a half year period. The voluntary audit found that $7.7 million of the reported underpayments was due to misclassification of staff, where teachings of lectures and tutorials had been misclassified as workshops or laboratories, which are paid at a lower rate. $900,000 of the reported underpayments were timesheet errors, representing just 0.3% of all timesheets in that time period. 

‍

University of Sydney

‍

The University of Sydney has reportedly underpaid 36,000 casual, non-academic staff members $12.7 million in wages between 2014 to 2020. This was discovered after a yearlong review was conducted and found that the staff had been underpaid overtime and not received minimum engagement payments that entitled them to three hours pay when the period worked was less.

Why are they different? 

The causes of the underpayments are different from one another. One is a payroll error, two are  classification errors and one is a record keeping error. 

Australia Post’s underpayments occurred from a payroll error, which occurred whilst making termination payments upon leaving the postal service. 

RMIT University and Monash University underpayments have been caused by incorrect classification of staff who were not being paid the correct rate when either teaching or marking assessments. 

The Sydney University underpayments were caused by failure to pay staff the correct overtime and minimum shift engagements most likely a result of poor record keeping as to when staff were actually working. 

These stories in the market continue to show the number of complex factors that are involved with getting pay right, there are a number of complex factors involved in accurately paying employees in Australia, which you can read more about here.